Recently I was listening to Erin Moriarty, the voice behind the excellent Erin Talks Money channel on YouTube. She released a video titled “The Retirement Research is Right” that dove into a fascinating Morningstar study.
The study revealed a truth that financial advisors have known for years. Most people don’t actually spend down their retirement savings. In fact, retirees frequently die with the exact same amount of money they had on the day they retired, or perhaps even more.
The consensus reaction to this data from financial experts and the “Die With Zero” crowd alike is that this is fundamentally sad. The narrative suggests that we waste our healthy years squirreling away money only to leave a massive fraction of it untouched. If only we had spent that money on experiences, the thinking goes, we would have had a much happier and more fulfilling retirement.
I disagree entirely.
The Flawed Goal of Accumulation
When we talk about accumulating wealth, we tend to get hyper-focused on the math. We argue endlessly over safe withdrawal rates, debating whether the perfect number is 4%, 5%, or 6%. We obsess over the 25x rule. But by zeroing in on the formulas, I think financial experts completely miss the actual purpose of accumulation.
The point of building a massive net worth is not necessarily to fund three decades of lavish post-retirement spending.
The true purpose of accumulation is something I call escape velocity.
Buying Courage, Not Things
It does not matter what your specific accumulation goal is. The vital role that number plays is simply giving you the courage to escape a life you no longer enjoy living. For most people, that means escaping a job they do not like.
The point of accumulation is not to fund your life after you leave. It is to provide the psychological safety net required to make the leap in the first place.
Once you leave that draining job, something interesting happens. You finally have the time and space to become a better version of yourself. You can spend your days with the people you actually want to be around.
Here is the secret. Becoming the best version of yourself does not actually require you to spend down your portfolio.
Most people will spend money on experiences, but they do not feel a compelling need to drain all the funds in their accounts. Whether you believe it or not, spending on experiences and material things only makes you marginally happier. What truly brings joy is simply living the free life you wanted to live. That freedom rarely costs as much as we think it will.
Why Underspending is a Success Story
When you finally hit escape velocity and leave your job, you will likely realize that you accumulated ridiculously too much money.
And that is perfectly fine.
If you leave millions untouched in your bank account when you die, that is not a tragedy. The real tragedy is never figuring out the purpose of saving in the first place.
So go ahead and accumulate millions. Base your math on an ultra-conservative 3% safe withdrawal rate. Save too much money.
If that is what it takes for you to emotionally make that big life change and take the leap of faith, do it. Because the alternative is suffering from “One More Year Syndrome,” where the fear of not having enough keeps you stuck in a job you hate forever.
Ultimately, it was never about how much you saved. It was about finding the courage to leap.
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"Your portfolio isn't a spending account. It is a courage fund."
Even after working with wealthy people for decades and seeing this play out repeatedly, I didn't believe it would apply to me. I like to spend, I like nice things, I was retiring so young. And yet here I am only two years in with much more than I started, with more income than I expected, with spending trending a full 20% less than I projected.
Come on in! The water is fine...
I call this your minimum viable fuck you number. Courage fund sounds far more polite but our main theses appear to be largely identical. 😎