Sticky-fingered Heirs

I should not be surprised anymore when my wife interjects some quote from ancient Greek or Roman literature into a conversation. We were sitting around a table at the Valentine’s Dance discussing the inflationary costs of housing and home maintenance. The wealthiest of the group soon shifted into how their investments were behaving in the current market, while I sat wondering if I had enough leftover from my pension to even join the conversation.

One wag said his children had asked him if he had his will up-to-date and he told them all they would be getting was a bunch of payment books for his debts. They could divide it up as they pleased. This was when my wife quoted Horace and his reference to his ‘sticky-fingered heirs’ who were apparently after his Roman estate. The conversation turned philosophical, everyone having their own view on whether they should be trying to build up their estate for their children or grandchildren or whether they ought to be spending it all now.

We all know you can not take it with you; but thinking about the comment of leaving debts, I thought it just as interesting that you could not take your debts with you either. Does one continue to work at building up a fortune or accumulate debts? Perhaps it is force of habit that drives them, but I can not really understand why those retired people who already had more shekels than they could ever spend, want to fret over making more money.

When you are young, you have to think about building enough of a retirement fund to keep you in your ‘golden’ years after your regular income stops. I am looking upon my retiring years more as polished brass rather than golden, but that is another story. Investment consultants will tell you that after age thirty (about the time you start looking for one of those money managers) you should be putting away about ten percent of your after-tax earnings. Since they get a small percentage of your nest egg, they would like you to invest more, but ten percent should do.

They will give you magical charts that break out your investment strategy by your risk-comfort level. As you age, you should reduce the risk factor since if things go amok in the market, you have less time to recover. You ‘recover’ by stashing away 20% and as a result, giving more to the money manager. These charts, and you can make your own on a spreadsheet, estimate how long you will live; what the inflation rate will be; what interest or return you will get on your savings; and what your day-to-day living costs will be.

Variables, such as if you smoke or drink a little too much, will shorten the years you can plan on living. Lifestyle, hobbies, active recreation and whether you are Liberal, Conservative or NDP can also be factored into your life expectancy plan. Happily-married people live longer but must factor in the spending habits of the spouse. Unhappily married people do not concern themselves with these charts. Single women outlast single men.

The final line in your chart will be whether you want to leave money to your sticky-fingered heirs or exit flat broke. If you are among the former, your investment dealer will stick with you. But if you are the later, then you are not their meat. What money manager would be able to present you with a chart that has an end date on it? What happens if you pass they ‘best-before’ date and fail to expire on schedule?

Those who like their Biblical references will be starting to wonder what has happened to the three score years and ten when the life expectancy is now approaching four score years. Those same people will be recalling how to be charitable and some parable about a rich man, a camel, and the eye of a needle, so they may not need the money manager in any case.

Personally, I use a very simple formula: time left = money to spend. And every morning when I open my eyes, I know I have one day less to spend it!