Jan 25, 2026
Ideally, retirement is meant to be the most relaxing phase of your life. In practice, however, many retirees likely worry about money, making them easy targets for salespeople and brokers looking to offer deceptively appealing products.
If your email inbox is flooded with pitches for "guaranteed income” or “financial protection,” proceed with caution. Here are five products retirees are often urged to buy that they typically don’t need.
1. Life insurance
Some insurance brokers might insist that a life insurance policy is an investment. But in reality, life insurance is designed for income replacement, and once your income stops, that logic weakens.
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In fact, life insurance may no longer be necessary after age 60, depending on your financial obligations and assets, according to Experian (1). For example, if you’re an empty nester with no dependents, term life insurance may offer limited value.
And if you have dependents, your investments, retirement savings and Social Security could be enough to provide for your survivors who may still rely on your income, as well as final expenses. If that’s the case, you may not require life insurance in your 60s.
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2. Indexed annuities
Fixed and variable annuities are complex financial products, and some institutions have gone a step further by offering indexed annuities, which can be even more complicated.
According to the Financial Industry Regulatory Authority, indexed annuities have surged in popularity because their features appear to combine elements of fixed and variable annuities (2).
In practice, however, these products are often complex, carry high fees and deliver returns below investor expectations, according to Consumer Reports (3). Many indexed annuities also involve steep surrender fees that can lock investors in.
If you’re looking for a solid long-term investment, indexed annuities may not be worth the trouble. Consider a low-cost index fund instead.
3. Expensive or complicated investments
Exotic investment opportunities can be tempting, especially if you’re worried about catching up and expanding your nest egg quickly. But these so-called “alternative assets” often carry hidden risks that can outweigh their potential benefits.
Recent rule changes mean some 401(k) plans can now include things like private equity, private debt, venture capital, hedge funds and infrastructure funds. That may sound appealing, but these new inclusions may not be a good fit for many portfolios.
According to analysis from the Wall Street Journal, many of these alternative assets come with elevated risks, high fees and low liquidity, which often erode their long-term returns (4).
In many cases, a low-cost index fund or government treasury security may be a better fit for your portfolio. As Warren Buffett once said (5): “It is not necessary to do extraordinary things to get extraordinary results.”
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4. Vacation homes or timeshares
A second home in a ski resort or on the beach could make for a great retirement, and it can be easy to justify the purchase as an investment due to the increase of free time at your disposal.
But property taxes, insurance, maintenance, HOA fees and travel costs can quickly add up. Timeshares are even worse: they often come with high upfront costs, annual fees that frequently rise faster than inflation, and a limited or nonexistent resale market.
What is sold as a lifestyle upgrade often turns into a fixed, ongoing expense that limits financial flexibility later in retirement — precisely when flexibility is most important.
5. Reverse mortgages
A reverse mortgage could be an enticing way to tap into your home equity in retirement. For many older Americans, it can provide access to wealth tied up in what is often their largest and least liquid asset.
However, these financial instruments aren’t the right fit for everyone. Many contracts involve high upfront fees, exorbitant interest rates and the risk of foreclosure if taxes, insurance or maintenance obligations aren’t met. They could also diminish the inheritance you plan to leave behind for your children or loved ones.
All things considered, there may be simpler, lower-cost ways to generate cash flow in retirement.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Experian (1); Financial Industry Regulatory Authority (2); Consumer Reports (3); Wall Street Journal (4); CNBC Make It (5).
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
