Evelyn is turning 65 and about to retire — and now her kids are talking about something called ‘Swedish death cleaning.’
While it may sound morbid, Swedish death cleaning is a philosophy rooted in practicality. In Swedish, it’s known as döstädning, which is essentially a decluttering exercise that helps you simplify your life while reducing the burden on loved ones once you pass.
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As you age, you start getting rid of ‘stuff’ you’ve accumulated throughout your lifetime that you no longer need — so no one has to do it for you later. You keep what’s useful or meaningful and let go of everything else.
“Visit [your] storage areas and start pulling out what’s there,” writes Margareta Magnusson — who popularized the philosophy — in her 2017 book, The Gentle Art of Swedish Death Cleaning. “Who do you think will take care of all that when you are no longer here?” This isn’t meant to be depressing; rather, she says it can be “a delight to go through things and remember their worth.”
But Swedish death cleaning isn’t just an amped-up version of spring cleaning. It can also be part of your retirement and estate planning.
Swedish death cleaning for your finances
Since Evelyn is about to retire, decluttering could help her downsize her possessions and possibly even downsize into a smaller home, which could reduce her living expenses in retirement. By being more intentional about what she’s spending and acquiring, it could help her manage her retirement funds and spend on what matters to her most.
But it’s not just about decluttering possessions. Swedish death cleaning your finances could include closing accounts you no longer use and getting rid of paperwork you don’t need anymore. For example, do you really need those boxes in the basement with 30 years’ worth of tax documents? Find out what you need to keep and then shred the rest.
It could also mean organizing your bills, bank account information, insurance information and other legal documents so your heirs will have everything they need at their fingertips to manage your estate. You can store that information in a system of binders, in a safe deposit box at the bank or in a secure online portal (or a combination of all three).
To declutter your finances, you could focus on paying off any high-interest debts now so you don’t leave that behind for your heirs. You may also be able to consolidate some of your financial accounts. For example, do you have more than one 401(k) and could you roll those into a single IRA?
It’s also a good time to revisit and rebalance your investments. For example, since Evelyn is about to retire, she may want to shift her investments into lower-risk options, such as fixed-income securities or money market funds.
Also, make sure your will is up-to-date, and be sure to update the beneficiary details in your will, pension and life insurance policy.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Clean up your estate too
Applying the philosophy of Swedish death cleaning to estate planning can spare your loved ones from financial stress after you pass. Imagine if Evelyn leaves behind piles of belongings, from a house full of furniture and collections of knick-knacks to stacks of old photo albums. Going through all of this can be a time-consuming — not to mention an emotional — process for her children.
Ideally you’d want to facilitate a smooth transfer of wealth to your heirs. That means considering estate planning and tax implications now. Not only does this reduce the burden on your heirs, it can help you preserve your assets and your legacy — ensuring your wishes are honored.
For example, Evelyn may want to leave something behind for her children and grandchildren, but she may also want to leave a gift-in-will to a charity that has meaning for her. Her late husband passed away from cancer, so she may want part of her estate to go toward cancer research.
It’s important to have a conversation with your loved ones about what they want — and, perhaps more importantly, what they don’t want. Maybe Evelyn’s adult children don’t want her crystal and china, so she could give it away or donate it as part of her decluttering process.
Incorporating Swedish death cleaning into your estate planning could also make it easier to update your will by reducing the number of possessions you’re leaving behind and explicitly stating who receives what. If you live amongst clutter, you’re less likely to specify who receives each one of your assets, which could create conflict between family members once you pass.
It’s also a good opportunity for tax planning, so you can minimize the taxes on your estate — and leave more for your loved ones. This could include revisiting your Inheritance Tax (IHT) strategy to help reduce the liability on your estate.
The transfer of your estate could be subject to an estate tax if its value surpasses the federal exemption limit. A handful of states also have an inheritance tax, which is paid by the beneficiary; some states have estate and gift taxes on top of federal taxes. It could be worth consulting with a tax planner to ensure you’re maximizing what you can pass on to your heirs.
Your executor will be responsible for settling your estate, so if you streamline your possessions now, it will make that process easier — and less costly — when the time comes.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
