No Limits Ladies.com

I was watching an interesting interview with Jacob S. Hacker, author of The Great Risk Shift. He was talking about how risk was being shifted from employers and governments to individual people like you and me.

A decade or so ago, workers had defined benefit pension plans which meant that when they retired, they could expect a set amount of money per month from their pensions. The companies were responsible for figuring out how much had to be invested and where in order to provide that set amount. Employees? All they had to do was cash their checks.

This got too expensive for companies so most have moved to either a defined contribution pension plan or vehicles like 401k’s. Now the roles have switched. All employers do is send in the check for contributions and employees have to figure out how much and where to invest it. The risk of not meeting retirement goals have moved from the company to the individuals. In other words, you and I have to look out for ourselves.

This has happened not only for pensions but for health care also with the popularity of health savings accounts. We’re on our own.

Now, the author suggests getting companies and governments more involved. I don’t think that is going to happen anytime soon. And honestly, I like to play with the hand I’m dealt right now. If the impossible happens and other people pitch in to help, then fine, that’s gravy but I’m not counting on it.

You and I have to figure out this investing thing on our own. We have to learn how to handle risk. We have to educate ourselves and not wait for anyone, not the government, not the company, not a man, to provide for our future. It’s not a nice-to-do, it’s a have-to-do.