How to Spot Retirement Hogwash

Or, what the retirement industry doesn't want you to know

Some call it hogwash. Others call it B.S. No matter what it's called, those on the verge or already in retirement need to be on the lookout for it. Older Americans must have their "detector" up when it comes to the products and services being hawked by those in the so-called retirement industry.

According to John E. Nelson, the co-author of "What Color is Your Parachute? for Retirement: Planning Now for the Life You Want," older Americans must be able to tell the difference between the products and services they really need and want vs. those that firms -- especially in the investment, insurance, real estate, travel, retail and anti-aging industries -- want them to be buy.

Otherwise, the retirement industry will get what it wants -- more sales -- instead of Americans getting what they want.

And to that end, Nelson has created what he calls the retirement hogwash detector. It's a detector that he says can help Americans sort through the retirement lifestyle they want and need versus the one that Madison Ave. wants to sell them.

"The retirement industry wants to define your retirement for you," said Nelson. "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. Instead of discovering your identity, they want you to simply identify yourself as a consumer. They want images of products and services dancing in your head so that you make acquiring them the goal and the purpose of your retirement. They want consuming to be your highest purpose."

Americans may truly want and need some of the products and services being marketed by the retirement industry. But at the moment, more Americans than not are basing their decision to purchase on emotion. And that's because retirement industry firms are increasingly using sophisticated techniques to persuade Americans to buy this or that retirement "lifestyle."

According to Nelson, these firms are selling experiences -- visions of what the ideal retirement looks like -- and they are using something called lifestyle marketing to separate older Americans from their money. Nelson says the retirement industry wants consumer to believe they will be in pain if they don't buy into its definition of what retirement should be.

Outfoxing the marketers

So what's the best way for older Americans to get what they want instead of what the retirement industry wants them to get?

Nelson says part of the answer lies in older Americans completing his version of the "Ways to Live" exercise that was originally developed by Charles Morris at the University of Chicago in the 1940s. That exercise, and another which can be found in the book, can help older Americans figure their idea of the good life, as well as what they value, their identity and their priorities. Learn more at this Web site.

But even if you don't complete the "ways to live" exercises, it's still possible to protect yourself against Madison Avenue, Nelson says. And that's by taking each and every advertisement through his retirement hogwash detector. It's a series of questions you can use to evaluate pitches and decide whether to buy a product or service or not.

Here's his list:

• Pitch. What are the facts and actual features? What are the greater implied benefits, as suggested by the pictures, music, style or tone? What emotions are these designed to trigger? In the case of advertisements by luxury automakers, the desired emotion is to make the customer want more social status.
• Underwriter. Who's behind the pitch? What's the marketer's motive? Does the marketer want an ongoing relationship or just a one-time transaction? Does the marketer really have any interest in your well-being? Those marketing romantic getaway cruises likely don't care about their patrons.
• Assumptions. What are the underlying messages about you or the world? What are the hidden values or beliefs? In your experience, are these really true for you in your own life? With cosmetic surgeons, for instance, the hidden belief is that old is less desirable and valuable and young is more desirable and valuable.
• Ideal outcome. What's the most you can realistically expect? Could you actually get the implied benefits? What can this do for you and what can't it do for you? In the case of advertisements by the plus-50 residential real estate industry, the implied benefit is that your neighbors will be beautiful people. The reality is that your neighbors will be real people, not professional models.
• Needs. Why might you really need it? Why might you not need it? What are the alternatives? Finally, what higher need can you identify that the pitch hints at, but could never fulfill? How might you really fill this need? Consumers who are being sold investments, for instance, need to learn more about the investment or get advice from a trustworthy source.

For Nelson, the need to detect hogwash is among the keys to a fulfilling retirement. In fact, it could represent the difference between having a life of "voluntary simplicity" versus a life of "involuntary poverty."

Robert Powell has been a journalist covering personal finance issues for more than 20 years, writing and editing for publications such as The Wall Street Journal, the Financial Times, and Mutual Fund Market News.