The Ungrateful Dead

Grateful Dead, the US rock band, is this year celebrating 50 years of, well, live performances, I guess. I bet the founding members didn’t think when they formed the band in 1965 and gave it such a great name (that pun was actually intended) that they wouldn’t be around half a century later. I guess it just goes to show, you just can’t tell how long you will last in this world.

Which makes me think of the pursed-lipped tut-tutting that is happening in Australia right now about The Ungrateful Dead. These are people who have the temerity to die before using up all their superannuation savings, hence bequeath the residual to the next generation. Here’s a piece of journalism on the topic in today’s Financial Review:

“This year an estimated $8.5 billion will be bequeathed by the estates of Australians who die before using up their retirement savings, according to superannuation advisory firm Rice Warner.”

The social services Minister has stated that he thinks that people who have been granted tax concessions to build up their super should actually spend it, rather than saving it and drawing the age pension. There is some logic missing in there, given our means-testing system that increases the amount of age pension when you have less assets separately, but we’ll let it go.

The Ungrateful Dead. So many media commentators today are lining up and tut-tutting their mean, thrifty behaviour – unfairly using tax concessions to pass on wealth to the undeserving next generation. It’s not more than a few years ago that the Ungrateful Dead were being criticized for blowing their super savings on a round-the-world holiday then coming home to live on the pension. Double-dipping, it was called. And then they didn’t die soon enough!

If you want to avoid this disapproval in the eyes of the journalists writing this stuff, then you should do the sensible thing and plan to use up all your savings on the day you die. This only requires a simple calculation of how much you should spend each year once you determine what your future investment return will be and how long you will live for. Simple, really.