The financial industry bombards us with retirement planning advertisements.
We need the help of financial professionals to properly save for our retirement, according to them. The TV ads showing the happy retired couple riding the bikes with the picnic basket while laughing and smiling shows us they are having the times of their lives in retirement, thanks for their financial plan provided by the advisor/advertiser.
That’s the positive way they try to attract us to their services and there are negatives ways too. How many times have you heard “How do you know how much you need for retirement?”. Don’t run out of money. How much do you need to save for retirement? We can help you along the path of retirement planning. What are the best investments for retirement? Then finally how much can you safely withdraw from your retirement savings to live on?
I don’t know about you, but I get tied of hearing all of this. It creates a feeling of anxiety about retirement that does not need to be. It is self serving to the huge financial planning industry. Consider the source. Besides how much do they really help.
I am a sort of independent thinker and try observe things I see in my own life experiences to form my opinions. With that in mind, I think most of these financial planners do more harm than good. Most of the financial “experts” are wrong in their predictions and advice. They try to asset allocate us, annunity-ize us, and insure us, while taking their commissions.
When I started building a bond ladder about 8 years ago, the fixed income department at one of the largest brokers told me not to go out on maturities more than 3 or 4 years, because surely interest rates would be going up. Wrong, they went down and are still going down.
On the radio you hear from people who were sold something and they have no idea what it is. Other advisers push people into stocks when they don’t have the temperament only to see their retirement savings plummet in a crash. They end up selling and loosing just about everything. These advisers seem to push people into the same investments while they are doing good and when they turn sour, then the exit door gets real crowded and they loose money.
The financial advisers usually make their income from Wall Street. I made more money owning real estate and starting my own businesses. You really have to watch turning all your money over to a financial adviser as you will miss other opportunities not in their scope.
Besides how useful are their predictions? The Federal Reserve can’t even predict where things are going or even get a handle on the where we are in the economy. I remember Ben Stein the TV financial adviser pushing China stocks only to see them crashing. He was so certain buying Chinese stocks was the way to go. I see Ben Stein spoke to the AARP convention recently giving out more of his advice. These people just change their story and keep peddling. Financial guru Suze Orman is completely wrong about this retirement myth so says this article.
One place you really need to beware taking advise from is the talking heads on financial TV shows like CNBC which is notorious for Pump and Dump, that is an expert saying to buy while he is selling the same stock.
There is some basic financial retirement planning advice that would be helpful if followed, like starting to save early, like on your first job. Pay yourself first, meaning take out some for your saving account first. Open up tax advantaged accounts like IRAs and don’t borrow against them or cash them out. Don’t refinance your mortgage and take cash out, try to pay off the mortgage instead. Avoid debt when you can. Don’t live beyond your means. In your working years, develop and improve your skills and you will not have a problem keeping a job. Don’t give all your money to your kids or grand kids. Don’t trade stocks. Giving yourself a financial education by reading and studying. Most of these ideas are just practical things you already know, or should know.
In the end financial planning only facilities your having a happy retirement, it is not your retirement. There are a lot more fun things to do in retirement than worrying about money. People who are retired know that. I think these financial planning ads are geared towards people in their 40s and 50s who are worrying about their retirement.
Have your been helped or hurt by financial advisers? Let me know in the comments.
Retired and Loving It!