When It Comes To Your Retirement, Beware Of The Absolute: OPINION
December 7, 2017 by Bob MacDonald
If you are on the cusp of retirement, get ready for more attention than a high school football phenom being recruited by scores of solicitous college coaches. The reason for your sudden popularity is that you are a member of a large group approaching retirement age that has accumulated almost $13 trillion dollars — yes, trillion — in a combination of IRA and 401(k) accounts, according to the U.S. Government Accountability Office. And while most of us have no idea what to do with our portion of those retirement funds, there are thousands of “advisers” who, like a sleuth of hungry bears attracted to a honeypot, are anxious to get their paws on your money.
Developing and implementing a plan for a secure, comfortable retirement can be complicated, and it is important to have good advice, but it is even more important to make sure it is the best advice for advisee — not just the adviser.
When facing retirement, there are many valid concerns: Will my accumulated assets generate enough guaranteed income to maintain a reasonable standard of living? Will the income continue as long as I live? Will the income keep pace with inflation? Will there be funds available to meet unexpected financial emergencies or medical expenses?
These are not easy questions to answer, and there may not be enough accumulated funds to resolve all the issues satisfactorily, but there are solid options available. It may be necessary to prioritize your retirement goals and explore a variety of alternatives to achieve them. In this process, it is imperative to understand that, no matter what some high-powered financial adviser may tell you, rarely is there a single, absolute option available to realize your retirement objectives.
Don’t limit your retirement options.
With all the options available for putting your money to work to create a secure and comfortable retirement, it is difficult to know which one is best for you and which adviser to trust for objective advice. But one thing is certain: Your retirement is too important for you to limit your options. With that in mind, be wary of the person pining for your money who offers “absolute” answers.
Here is what I mean by that. There is one guy who advertises heavily on television and social media, making the pitch that guaranteed income annuities are absolutely the worst financial product for an individual to own. He screeches that annuities are tantamount to a rip-off and, as such, (apparently to demonstrate his ethics) proclaims he will never sell them. But he does not stop there. The second stanza of his song proclaims that those who already own annuities have every reason to cash them in and move the money to a “better investment plan.”
Conversely, there is another guy who also uses television and social media advertising to pitch annuities as absolutely the best financial product for retirement. He argues that individuals should put most, if not all, of their retirement nest-egg into an annuity.