Once again, in Canada at least, not only have we now weathered the lion’s share of winter, but also the sales squalls of Retirement Season, those February ads inundating us with messages about financing our retirement nest eggs, our dream lifestyles. Can we travel, should we downsize? Can we afford the lifestyle we desire? Will we outlive our savings? As the Royal Bank of Canada (RBC) 2017 ad suggested, come in and see us, and “let’s make someday happen”.
At this prime time of the year, when these ad messages hit you all at once, (right before income tax season), you get the sense that it’s assumed – that first, you have a reasonable amount of affluence to have these fortunate lifestyle options – and second, that you have the required level financial planning literacy to ask the right questions. And – that your financial advisor knows the right questions to ask you – you personally.
Over the years, I’ve had an uneven experience with financial planners at the bank or elsewhere. At the risk of sounding like a rant, I will say that I could tell countless stories of those who were not only bad listeners, but were purely formula driven and transactional in their approach. Often the experience of sitting at the desk in their squishy office with shuffling papers and clicking keyboards made me think they would be just as effective using a Ouija Board to come up with the answers in the financial portfolio.
RRSP, TFSA, Mutual Fund or What?
Back to the marketing ads. How else would you be able to pitch retirement financial planning products and services realistically, other than by showing stylish, perky middle class couples in their frowning moments of indecision, racing in to their financial advisor to meet a deadline? The rough part of the answer to that is to say that these ads aren’t targeting those who don’t happen to have an abundance of financial assets to play with.
While all this plays out, the media still covers this topic of retirement planning, throwing a huge tarpaulin of gloomy reality over our future selves, with life expectancy projections that may not be the best indicator for how you make a nest egg plan. Imagine you are on your way for a meeting with your financial planner and you read – “Saving $1 million for a comfortable retirement used to be a lofty goal, but now, it may not be just enough.”
So goes that line in a CBC News post, Feb.23, titled Canadians projected to live longer, but can they afford it? Top to bottom, the rest of this article has comments on topics that have already, with various spins been said hundreds of times before. But these topics are suddenly dusted off here in light of a recent global life expectancy study featured in The Lancet.
It is an understatement to say that the financial advice comments in the CBC piece are not an answer for everyone (check for yourself). Reading further, you could lay through sleepless nights with worry over every supposition, from “the national debt might surge” (as if it hasn’t already), to more generational competitions for jobs and higher divorce rates if you live longer. Would you even dare think to ask the Ouija Board if any of these things were going to hinder your longevity?
On a macro level, I don’t think anyone would disagree that based on forecasts for the potential of a longevity society, that our social systems like pension plans and health care need to be constantly adapted or reformed in order to meet our future needs. But a once a year pit stop with a financial advisor is never a good idea, and when an RBC ad says “let’s make someday happen”, I think many of their customers would rather that it be now, not some mystic time in the future.
Financing for today is hard enough for most people, let alone financing for their longevity.