There is an enormous amount of advice that is being offered to retirees these days, so much so that it pays to have some basic rules on how to interpret and use it. The advice you will see on social media ranges from the likely benign, such as this commentary about a well-known financial writer:
“(person x) does an admirable job explaining why retirees really ought to consider a specific kind of annuity and how he personally plans to use annuities in retirement. Well worth the read for people soon entering retirement.”
To advice that would clearly be considered malpractice, offered by a self-described expert:
“If your financial advisor hasn’t recommended a small allocation of your portfolio to bitcoin by now, it’s time to fire them and hire someone who isn’t asleep at the wheel.”
So how do you make sense of it all? Should all advice given over the internet be taken with a grain of salt, or should you be open minded because you might just find a hidden gem of advice? The answer is somewhere in between, but with these three basic rules, you will be in a much better position to figure out what advice has merit, and which is to be relegated to the hype pile.
Who is the Advice Giver?
First, who exactly is offering this advice? Are they an individual investor just like you offering their personal opinion, or are they a known financial journalist or financial advisor, the latter two having a researchable and proven history? Today, anyone can write and opine on anything and it is becoming increasingly difficult to tell who is legitimate or even a human being. A financial advisor is regulated, their identity and disciplinary record is all public knowledge. A financial journalist that works for a major publication has an editor and fact checkers and their work can be found via a simple google search.
Is There a Major Bias?
Everyone in life has some form of bias, the question becomes is their social media post about a piece of retirement advice rife with conflict? Take for example the above pro-bitcoin commentator, he happens to be a founder of a company that sells an app supporting the investment in bitcoin. His comment is highly conflicted in part because he personally profits from the purchase of bitcoin, not to mention the poor advice that everyone should have at least a little bitcoin. The other above example was written by a known, professional journalist who has no publicly known relationship to any annuity provider and as a result, his comment has very little apparent conflict.
Is the Advice-Giver Saying Everyone Needs “This”?
It is quite rare that there is a piece of advice or a financial product that everyone must have. Therefore, beware absolute statements that you must do this or must have that. People who truly want to give quality advice on social media are very careful about the words they use and use terms that are not so declarative, rather suggest you should review, evaluate or consider. The facts and circumstances of every investor are different and that means blanket advice not only is improper, it can be detrimental.
On social media, there can be valuable information about retirement gleaned. By using these common sense rules combined with asking your financial advisor about the concept’s applicability to your personal situation, you will be best positioned to prepare for retirement.
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