I think that many people who are retired or approaching retirement are given poor investment advice. The main issue that concerns me is the use of pooled funds as a source of retirement income. Having one's savings in mutual funds, ETF's or other types of pooled funds is a recipe for disaster for the retiree.
The problem arises from the fact that the retiree is advised to hold his/her savings in a pool from which they draw income by selling units on a monthly or quarterly basis. These pools are valued at market prices, which can vary dramatically with the ups and downs of the market.
Every time a withdrawal is made the retiree is using up his/her capital which becomes a nightmare if the overall market plunges as it has a couple of times in the past few years. It is all very well to tell people to hang on and eventually the market will rise and their capital will return, but this is psychologically unrealistic. A common result is that the individual panics and sells their holdings at a bad time in order to avoid even more diminution of their assets.
Retirees are far better advised to invest in individual blue chip stocks, bonds, GICs, etc., which provide the needed income and whose income stream varies little if at all during market downturns. Stock dividends rise with the underlying economy and bonds and GICs return their principal when they are held to maturity. Additionally, this strategy incurs no trading costs, capital gains tax, or management fees, all of which further erode the capital of the holder of most pooled investments.
So why are most retirees seduced into inappropriate investments? Perhaps they are insecure and feel that a "managed" portfolio is safer, despite no evidence that most funds ourperform the market. Fear of having to choose blue chip stocks to invest in is groundless. If necessary one can simply buy the stocks that make up the Dow taking into account their relative weights. A good broker could assist in that endeavour. Once they are bought, minimal change is required.
I retired in 2005 and have survived using the above suggestions quite satisfactorily. I am dismayed at the number of friends and acquaintances who have been forced to go back to work or delay retirement thanks to participation in pooled funds
There may, of course, be some exceptions to my objections to pools. If one wishes to invest in some small or foreign market, an ETF may be appropriate. But the bulk of most retirees' investments should be in US large cap stocks and bonds, and they are best held as individual investments, for the long haul in the case of stocks, and until maturity for fixed income.