Self-Sustaining Retirement Marketing

Most of us dream of a comfortable retirement with the freedom to do what we want. We'd also like this retirement to start when we're young enough to enjoy this freedom. Parts of the investing industry tap into this desire with a self-sustaining marketing strategy.

We regularly see ads with images of retirees traveling, golfing, and generally enjoying an upper-middle class retirement lifestyle. While it is possible for an individual to achieve such a retirement, we can't all achieve it; there just wouldn't be enough young people to maintain golf courses, prepare food for us in restaurants, and provide all the other services desired by an army of wealthy retirees.

This guarantees that most people will fall short of the retirement dreams that are marketed to us. Most people are also aware that they are not on the right financial track for a dream retirement. This leads to the next type of marketing: retirement polls.

There is no shortage of retirement polls that reveal that most of us are worried we haven't saved enough. And based on the lofty goals of dream retirements, it is true that most of us haven't saved enough. This is regularly revealed by studies of how much money people should have saved by certain ages and how far short of these goals most of us have fallen.

The perfect thing about this marketing approach is that it never has to change. As long as the retirement dream remains beyond the reach of the average person, most people will necessarily fall short. And some fraction of these people will seek help from expensive investment helpers.

Comments

  1. larry macdonaldMay 31, 2011 at 5:55 AM

    My eyes glaze over when another retirement poll is announced. On the other hand, I wonder why there is so little advertising for RESP plans.

    ReplyDelete
  2. Michael JamesMay 31, 2011 at 8:04 AM

    @Larry: I suspect RESP accounts don't get much advertising because they rarely hold 6 figures or more. Here's summary of retirement polls: "103% of retirees will spend their golden years eating cat food."

    ReplyDelete
  3. Tara CMay 31, 2011 at 1:26 PM

    Fortunately my retirement dreams look nothing like the ads of people golfing and traveling. I have a good idea of how much I'll need and it's nowhere near the ridiculous astronomical figures they quote on financial management websites. I feel comfortable with my savings and plans.

    ReplyDelete
  4. Michael JamesMay 31, 2011 at 1:29 PM

    @Tara: That's exactly the main thing I advocate: think for yourself and learn what you can.

    ReplyDelete

Post a Comment

Popular posts from this blog

Short Takes: InvestorLine’s HISAs, 24-Hour Trading, and more

I recently moved some cash into BMO InvestorLine’s high-interest savings accounts (HISAs) that are structured as mutual funds.  Their designations are BMT104, BMT109, and BMT114, and they purportedly pay 4.35% annual interest (which they can change whenever they like).  However, the way they report the monthly interest payments is so baffling that I wasn’t able to sort it out in my first 15 minutes of trying.  A further complication is the following text in the HISA description: “The Bank may pay, monthly or quarterly, compensation to your Dealer at an annual rate of up to 0.25% of the daily closing balance in the BMO HISA.”  I couldn’t find any evidence of such a charge, but I haven’t been invested for a full quarter, and I can’t yet say that such a charge isn’t buried somehow in the confusing reporting.  I have more digging to do before I can recommend these HISAs. Here are some short takes and some weekend reading: Preet Banerjee explains the dangers of Robi...
Read more

My Asset Allocation

I’ve resisted discussing my asset allocation for some time, but now is finally the time to describe it and the reasons behind it. I’m not holding it out as a model portfolio; I believe it’s suitable for me and not necessarily anyone else. With that warning, enjoy the discussion and feel free to ask questions or take some pot-shots. The main reason why I haven’t discussed my asset allocation in detail before now is that I don’t want readers to treat it like a model portfolio and follow it blindly. Everyone’s situation is different. The need for variation in asset allocation from one investor to the next usually isn’t huge, but there is no one-size-fits-all portfolio. A secondary reason for keeping my asset allocation to myself is that I can’t be sure I’ll never change it. For example, I recently made the minor change of switching from an ETF of small-cap stocks to an ETF of small-cap value stocks . I don’t have any plans to change my current allocation, but I may think differe...
Read more

What to Do About Crazy Stock Valuations

Image
The last time I had to put a lot of effort into thinking about my finances was back when I retired in mid-2017.  I had ideas of how to manage my money after retirement, but it wasn’t until a couple of years had gone by that I felt confident that my long-term plans would work for me.  I had my portfolio on autopilot, and my investing spreadsheet would email me if I needed to take some action. I was fortunate that I happened to retire into a huge bull market.  I got the upside of sequence-of-returns risk.  The downside risk is that stocks will plummet during your early retirement years, and your regular spending will dig deep into your portfolio.  Happily for me, I got the opposite result.  My family’s spending barely made a dent in the relentless rise of the stock market. However, stock prices have become crazy, particularly in the U.S.  One measure of stock priciness is Robert Shiller’s Cyclically Adjusted Price-Earnings (CAPE) ratio .  In the U.S...
Read more

Archive

Show more