Op-Ed: Having $2M in the Bank When You Die Isn't Ideal

A 2025 Goldman Sachs survey found that 58% of US adults think their retirement savings will run out before they die. For the 42% who think they'll shuffle off this mortal coil with money in the bank, Morningstar's director of retirement planning, Christine Benz, has some advice: Let's stop lauding underspending in retirement. In an opinion piece for the AP, she explains that many of the retirees she speaks to boast about keeping their spending below the 3% to 4% initial withdrawal amounts that are often touted as the gold standard. "They tell me they've been good savers, they're frugal, they don't need more. Underspending seems to be part of their identities," she writes.

Sure, that's laudable, but the result is that someone starting with $1 million saved, withdrawing $39,000 initially (3.9% of the balance), and inflation-adjusting that dollar amount for the next 30 years would die with about $2 million in the bank. If you're thinking that's also laudable—those funds are usually inherited by relatives or charities—she argues that giving smaller monetary gifts to loved ones while you're still alive might be a preferred strategy.

The average age of someone inheriting money is 51, but more than 25% of people who inherit assets are over age 61. "By the time we hit our 50s and 60s, our life's trajectory is often well-established," Benz argues. The median inheritance of $69,000 reported in the 2022 Survey of Consumer Finances won't make a huge dent in what someone needs to pay for retirement. But a smaller gift earlier on—to go toward a home down payment, or to help pay off student loans—could be much more impactful.

"And it goes without saying that seeing your money put to good use in your own lifetime beats having it pass after your death," writes Benz. She acknowledges that "transitioning from saving to spending in retirement is psychologically difficult. ... But the more I know about in-retirement spending, the more I think that most people should embrace flexible withdrawal strategies that ebb and flow with a portfolio's balance, the better to withdraw more of their portfolios during their own lifetimes rather than leave behind big balances after death." Read her full piece here.