12 • MARTIN H. RUBY
Here’s a secret: almost everyone is struggling with the same three risks. Read the following descriptions and think about whether they apply to you: No. 1: Structural Risk — This risk is about the mechanics of saving. How are you saving? What savings vehicles are available to you? Who is helping you save? Is your employer contributing to your savings program? If so, how? Are government resources available to you? If so, what are they? Do you know which ones you should take advantage of and how to do so? How is your sav- ings program structured? These questions can make the difference between whether you are successful or not, especially if your goal is to provide a comfortable retirement for yourself. No. 2: Market Risk — Anyone who has followed the stock market over the last two decades is well aware of this risk. When you are saving money for your future, you want it to grow. Placing money in the stock market for that purpose comes with a risk that can best be illustrated by a pair of scales. Losses on one side. Gains on the other. The market giveth, and the market taketh away. This risk pertains to more than just Wall Street. Any time your savings are invested where loss is possible, whether it be stocks, bonds, real estate, or a host of other assets, you face real risk that your savings will not experience sufficient growth to offset losses. No. 3: Tax Risk — This risk is quite simple: How much of your retirement account will you get to use, and how much will you give to the IRS in paying taxes? Tax risk is perhaps one of the most underappreciated risks today’s savers face, and many Americans are doing nothing to address it. Many seemed resigned to pay any and all taxes presented to them as if there were absolutely nothing they could do about it. They believe Benjamin Franklin, who noted, “In this world nothing can be said to be certain but death and taxes.” Or perhaps Will Rogers, who said, “The only difference between death and taxes is that death doesn’t get worse every time Congress meets.” “The uninformed taxpayer will pay much more in taxes than the informed taxpayer.” I said that last one.
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