Why ETF Investors Need to Analyze Retirement Pitches

Saving for retirement is one of many financial goals for exchange traded fund (ETF) investors. When doing so, be wary of any "retire early" pitches. The old adage that if something seems to good to be true, then it probably is.

For example, Citigroup (C) and Ameriprise Financial (AMP) have been hit with fines as large as $12.2 million from the National Association of Securities Dealers (NASD) because their brokers approached employees from various companies telling them that if they cashed out their pensions and 401(k)s and invested with the brokers, they could expect to retire early. They did this without authorization, of course, reports John Rosevear for The Motley Fool. So if you see or hear any of the following pitches, proceed with caution:

• A broker promises you returns more than 8%.
• A broker encourages you to hand over your workplace savings for high-fee products such as Class B or Class C mutual fund shares or annuities.
• A broker says you can withdraw more than 5% of your savings every year.

These examples also highlight why it’s important to know the difference between financial advisers and brokers. If you suspect someone is trying to pull the wool over your eyes, check out the Financial Industry Regulatory Authority (FINRA) Alert on retirement pitches.