Bill Maher Couldn't Keep Quiet About This Woke Issue Anymore
It's Not Hard to See Why NPR's New CEO Dodged This Simple Question...
The Washington Post Wants You to Feel Bad for These People. Don't.
Here's How Iran's Foreign Minister Responded to Israel's Latest Strike
Biden Admin Faces Heat After Announcing Drastic Plan That Fuels Radical 'Climate Change'...
Democrats in This State Want to Become a ‘Sanctuary’ for Kids to Access...
'Repulsive:' MTG Goes Scorched Earth After Massive Ukraine Aid Package Approved
HHS, National Archives Hit With Lawsuit After Being Caught Deleting Emails of Former...
Democrats Wave Ukrainian Flags, Cheer 'Ukraine!' After House Passes $60 Billion Aid Packag...
House Passes Johnson's Foreign Aid Bills, Expected to Be Passed by Senate and...
Planned Parenthood Abortions Is One of the Top Leading Causes of Death in...
California Dems Weaken Bill to Make Buying Child Sex a Felony
Bombshell Testimony Reveals WHO Pushed for COVID Vaccine Passports Despite Knowing They We...
Corrupt Letitia James Asks Judge to Reject Trump's $175 Million Bond
Dem Official Says It's 'Not a News Story' Would-Be School Shooter Identifies As...
OPINION

Retirement Dilemma

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
Advertisement
Advertisement
Advertisement

There's a new movement afoot to ditch 401K retirement plans and replace it with a government run- supervised program. The rationale is that the average fund has only $18,000 and it's been a bust. While I have an issue with that number, it’s not 401Ks that have failed Americans- Americans have failed themselves.

Advertisement

People keep dipping into these plans by using them as piggy banks; the same way they were once used for home equity loans and refinancing. In 2010, Americans had taken out $60 billion prematurely and in 2011, $57 billion.

The fact of the matter is, while there is a need for more discipline, the real losers are those who have not established a 401K.

According to the Empower Institute, we need 75% to 80% replacement of current income to live the retirement of our dreams.

However, holding too much cash is the biggest retirement mistake. In savings portfolios (that aren't qualified plans), cash levels on average is 35%, and within qualified retirement accounts, cash is at 55%. I get that people missed the bottom and now feel as though it’s best to wait and buy at the top. However, the focus has to be on the next 200% move, not the next 20% to 30% correction/bear market.

Last night, after the close, Kraft (KRFT) was put into play with news of a potential bid from the Brazilian investment firm 3G Capital. It is more than Mac & Cheese; however, the day before, some would argue the stock was fairly priced with a 17 price-earnings ratio (PE Ratio) or expensive changing hands with a 4.0 price-earnings to growth ratio (PEG Ratio). The point is, this is a company that will throw-off serious cash for centuries. Since borrowing is so cheap, it seemed like a no-brainer...in hindsight.

Advertisement

The no-brainer part is that you have to be invested, which is different from trading as the (KRFT) above shows. There is no doubt a lot of people stopped out of short-term trade when the stock got under $63.00.

Today’s Session

Today’s durable goods order report from the Census Bureau provided something more than just disappointment. For the month of February, new orders declined by 1.4% month-over-month which is quite the reversal from a positive 2.0% gain in January and is also below the +0.7% consensus estimate. This is very frustrating. I just don’t believe businesses are going to pump up the volume, especially with Obama’s policies making it harder for them to operate and manufacture new equipment.

Though the major indices are indicating slightly higher, yesterday’s selloff into the close is still worrisome.

Join the conversation as a VIP Member

Recommended

Trending on Townhall Videos