Banks, insurers and pension managers care about one thing. And it’s not the customer. It’s the bottom line. And each day you’re alive, you’re costing them money.

So it makes sense that they’d try to put an expiration date on your life. After all, that’s why they pay actuaries the big bucks to figure out just how long you’ll live.

But Steve McDonald says they’ve gone too far. They’re sucking the joy out of life for retirees. Get the scoop in this week’s “Slap in the Face” Award video.

Transcript:

This slap goes out to the folks who run the money world, especially the ones who assist with retirement planning.

There’s one component of financial planning for retired persons that has always mystified me. And I mention it now because it came up again the other day.

A friend of mine was recounting a recent conversation with one of his clients about the length of a bond’s maturity. The client wanted to know what would happen to the bond if he died.

My reaction was, “what do you mean, ‘if’?”

Now, it was meant to be a joke, but the whole concept of when we die is the one variable we can’t control. Yet, somehow, when it comes to planning, we are expected to know or assume a set date or number of years.

For example, I spoke to a salesperson in the long-term care field last year. When discussing coverage, he asked me, “how long do you think you’ll need this coverage?”

I was shocked. I’m supposed to know when I’ll suddenly recover from illness? And I’m supposed to know the date of my death in advance?

I don’t get it.

And it isn’t just about long-term care. Most retirement planners assume that you’ll live to a certain age. They calculate it based on the insurance industry’s actuarial tables. But what if they’re wrong?

Does someone show up on the birthday you weren’t supposed to have and say, “oh, sorry about that, here’s a check to cover your additional years”?

The same thing applies to life insurance. I recently asked a friend of mine for a quote. His first question was, “how long do you want the policy to cover you?” and he wasn’t trying to be funny.

How am I supposed to know?

Does my car insurance or health insurance shut down when I reach full retirement age? Or how about FDIC? That’s insurance, too. Is there a cutoff date when my bank deposits are no longer covered?

I don’t understand why, when it has to do with retirement or end of life, we are supposed to suddenly be clairvoyant.

I’m sorry, there has to be a better way.

Good investing,

Steve