Wednesday, March 07, 2007

Stop saving for retirement!

In a completely irresponsible MarketWatch column yesterday, Paul B. Farrell makes the assertion that Americans are being duped by Wall Street into saving too much for retirement.
Warning, you're being hypnotized: Wall Street insiders, bankers, brokers, advisers and their buddies want you to pile up assets. Why? Not for your own good, but because the more securities you own, the more money they make in fees! Get it?
Farrell seems to think that your pension, Social Security and perhaps a part-time job are all you'll need in retirement.
Focus on income: Pensions, Social Security, IRAs, and a new career, business or some part-time work. And remember, savvy families also quietly build wealth in home equity. Pay off the mortgage, live debt-free. Downsize. Maybe cut costs moving to a cheaper region. Go for a reverse mortgage. Be creative. Add up these pieces of income and you'll see how to reach whatever you need to live comfortably in retirement.
That's all just fine Paul, as long as you neglect the fact that the defined benefit plan has gone the way of the ten-cent cup of coffee and anyone who has read a newspaper in the last decade has serious questions about Social Security's sustainability. Besides, being a greeter at Wal-Mart is not part of my retirement plan.

Who wants to take their chances on Farrell's advice? Anyone?

Note: Mr. Farrell (Dr. Farrell, actually) has a law degree and a PhD in psychology--proof that a good education doesn't necessarily make you smart.

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