As a soon-to-be retiree, you represent an enticing target for companies in the so-called retirement industry, which encompasses investment, insurance, real estate, travel, retail and anti-aging.
They want to sell you products and services that may help their bottom line more than your financial security. They will employ sophisticated marketing and licensing strategies to pry cash from your nest egg. You must keep your guard up.
Some of the companies are providing a valuable service. Some are not.
According to John E. Nelson, co-author of the popular What Color is Your Parachute? for Retirement: Planning Now for the Life You Want, it is essential that baby boomers learn the difference between the products and services they really need and the ones that companies want them to buy.
Nelson, a retirement planning consultant, says some of these products and services are worthwhile. You will need some goods and services the industry markets at some point in your retirement.
But many of the things companies advertise are simply unnecessary for a successful retirement. These companies are involved in “lifestyle marketing.â€
He calls their marketing approach “retirement hogwashâ€–that is, “emotion-laden advertising messages.â€
“The retirement industry wants to define your retirement for you,â€ says Nelson, whose newsletter offers life-stage planning advice. “Instead of choosing a way to live, they want you to buy a lifestyle.
“Instead of reflecting on your values, they want you to value consuming the right investments, the right insurance, the right real estate, the right travel, the right retail goods, and the right anti-aging products.â€
The retirement industry will try to persuade you that buying their various products will open the door to a wonderful retirement.
Before you say yes, use Nelson’s “hogwash detectorâ€ to evaluate the product or service. Ask questions about:
Pitch. What are the facts and actual features?
Underwriter. Who’s behind the pitch? What’s the marketer’s motive?
Assumptions. What are the underlying messages about you?
Ideal outcome. What’s the most you can realistically expect?
Needs: Why might you really need it? Why might you not need it? What are the alternatives?
Retirement hogwash is not about lying to retirees, Nelson says. It’s really about companies trying to sell you something that’s not a good fit for your values.
“Hogwash is not so much a universal untruth as it is a misalignment with your personal values.â€