When it comes to financial advice, it seems that everyone has plenty to offer.
Invest in these stocks, not those.
Sell those shares now, not later.
Use your savings to buy property, not stocks or bonds.
And the list goes on.
You’d think that once we reached the ripe old age that means we get to retire, people would quiet down a bit with the unsolicited advice.
But of course, that’s not what happens - in fact, it’s the opposite. Next to college grads who are just entering the job market, retirees might be on the receiving end of the most financial advice of any generational group.
While plenty of it is good, solid advice, like plan for the expenses of long-term care or consider a life settlement if you no longer need your life insurance policy, some is flat-out wrong.
Here’s a selection of some of the strangest financial advice that retirees have gotten over the years.
There was an entire book written to encourage people to take this unconventional approach to their financial lives.
Die Broke, by Stephen Pollan and Mark Levine, offers readers a four-part plan designed to give them greater freedom than conventional financial wisdom does. There are doubtless some gems of financial advice within Die Broke, but retirees who consider taking this approach should beware.
For one thing, dying broke is only suggested if you’re planning on working for your entire life. If this is your plan, and something catastrophic happens - a terminal illness, or major injury, for example - you may find yourself with retirement as your only option.
For another, planning to die broke means you could be playing a dangerous financial game. What if you run out of money before you die? That could mean living out your last days dependent on family members, or with an intolerable reduction in your standard of living.
Owning a home is always better than renting.
If you’ve been in your home for decades and own it outright, then yes, owning your home is certainly better than renting.
But nowadays, more and more seniors are finding themselves years and years away from paying off their homes. This is partly due to the financial crisis of 2008, which sent thousands of people into foreclosure or bankruptcy, creating major financial setbacks that many have found it hard to come back from.
And yet, some seniors are entering into 30-year mortgages either right before or during retirement. While owning a home often feels more secure than renting, in reality, there are a lot of potential issues that can prove catastrophic for retired homeowners.
The housing market could decline, for example. The home could need major repairs, like a new roof or foundation repair. These things can potentially derail your retirement plans, especially if you’re counting on making money off the sale of your home.
Friends are a great source of investment advice.
Now, if your friend happens to be a financial advisor, then he or she probably is a great source of investment advice.
However, if that friend is just someone who likes giving advice, financial or otherwise, then you’re probably safest to take it with a huge grain of salt.
This is especially true for retirees, since seniors are especially vulnerable to fraud and coercion regarding financial matters. “Friends” or even caregivers have been known to convince seniors to give them huge amounts of money to supposedly invest, or to pressure retirees into purchasing financial products that the friend or caregiver has a stake in.
The bottom line: If you want real financial advice, talk to an actual financial advisor.
Retirement brings with it a whole new set of financial issues to consider. To learn more about this time of life, read our post “5 Actions Seniors Should Take for Retirement.”