There is a commercial airing this fall that drives me a little crazy. It's an advertisment for the financial company that uses a breaching humpback whale for its logo, and it features a young couple fishing on a yacht with the young lady's father. (Since I am not perfectly well versed in the various types of nautical vessels out there, I asked J if he would consider the relatively small boat to be a yacht or a fishing boat. J remarked that fishing boats are working crafts, whereas the boat in this commercial is clearly a clearly a rich man's sea-faring toy.)
The young couple is metaphorically wringing their hands over their future ability to retire, and ask the old man how he and Mrs. Old Man knew they could afford retirement. His response: planning, good advice, and an annuity from the financial company that uses a breaching humpback whale for its logo. In a stunning moment of synchronicity, a humpback whale just happens to breach off the port side of the rich man's seafaring toy, and the young couple and the old man feign surprise and delight fairly well at the splicing of the whale video into their commercial.
I'm annoyed by this ad for a couple of reasons:
1. The old man states that their annuity income will be there for them, whether Social Security is all there or not. Frankly, I doubt that a man who owns a fishing boat/yacht/rich man's seafaring toy is in the position to need all of his Social Security income in retirement. Clearly he has done very well financially in his career, which means he has either saved and invested his money well, or he and Mrs. Old Man would be in for a rude change-in-lifestyle awakening upon retirement--one that could not be fixed by an annuity. Having a man on the deck of a pleasure boat saying he doesn't need to worry about his Social Security income seems a tad redundant.
2. The young couple is also clearly doing pretty well. They're both well dressed and seem at home on the boat. Their concerns about retirement strike me as sort of overblown: "We can't retire in 30 years, because there's no way we could afford a new BMW every year anymore! We might even have to switch to the store brand caviar!"
Okay, I know I'm overstating this, but two gainfully employed young people who obviously have successful parents should not be wringing their hands over retirement. They know that they need to be saving and investing in their company's 401(k) or an IRA. They have time and the magic of compound interest on their side.
The young people who really do need to worry about retirement are the ones who are living paycheck-to-paycheck and who have no model for retirement because their parents are also on a hand-to-mouth existence. (Sadly, the ones who need to worry are the same ones who don't really know that they need to worry.)
3. The commercial makes it sound like dear old Dad is retiring with only an annuity and Social Security as his retirement income. Annuities to me still sound like an investment strategy for a 19th century spinster, even though they are not necessarily a bad addition to your retirement portfolio. My problem with them is that they are sold by insurance companies, which means that there's the possibility of getting stuck in a high-pressure sales pitch. And annuities are not FDIC insured, which means that if the insurance company who sold it to you goes belly up (so to speak), then you're out of luck. (To be fair, purchasing an annuity from a company as large and prestigious as the one that uses a breaching humpback whale for its logo is about as financially safe as you can get, which is pretty darn safe.)
But an annuity is not any kind of solution to retirement worries. It is a single strategy that one would use in a full arsenal of retirement strategies to keep you in fishing rods and yachts throughout your retirement.
Granted, this is a single 30 second ad which is just trying to sell people a specific retirement product. I know I should get off my high humpback whale about it.
I get frustrated because I see people all around me who really are not in a position to be prepared for retirement in 30 years, and commercials like this is about all that passes for education on the subject in our culture. We're living in a time when we all need to do the research and saving for ourselves, because it would be foolish for my generation to count on Social Security or a pension (remember those?) But saving for retirement is just about the opposite of sexy, and making these sorts of decisions is really hard, and 30 years is so very far away, so many people just don't think about this stuff.
Except for when various retirement product commercials come on. Meaning that when people do finally start thinking about their retirement, they're primed to call the company that uses a breaching humpback whale for a logo for advice. Because there was that nice commercial...