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Consider retirement. In 1985 the number of U.S. companies offering guaranteed pensions to their workers was 114,000. Only 38,000 did so in 2000. Filling the gap are 401(k) and other employer-sponsored plans that have introduced millions of Americans to the benefits of stock investing in the 1990s and created many millionaires, at least on paper. But these savings plans don't guarantee anything. Future benefits depend on how wisely we invest--which looked pretty easy until the market turned south two years ago. Now we are learning how much we don't know about risk and diversification and how poorly equipped most of us are to choose among 8,282 U.S. mutual funds. The yearning for reliable advice is so widespread that a Charles Schwab commercial shows a family doctor who makes a house call (remember those?) and winds up giving investment advice. "Wouldn't it be nice," goes the ad slogan, "if the person you trusted most was your financial adviser?"
Homeowners, meanwhile, must figure out whether they are better off with a traditional 30-year fixed-rate mortgage, a straight adjustable rate or a 3/1 hybrid. Parents must decide whether they should save for college in a Section 529 plan (who on earth names these things?) or a Coverdell ESA. We all want Marcus Welby for our doctor, but he is not among the options offered by our employer. Instead, we must choose among an HMO, a PPO or a POS. And if we lose our jobs, we must learn to get insurance through COBRA. Read a 4-in. pile of paper, and call me in the morning.
We are accustomed to having our dinners (not to mention our HMO homework) interrupted by the peddlers of long-distance phone plans. But now they have been joined by folks pushing wireless service and, in more and more communities, by sellers of competing local phone service. As a result of the deregulation movement championed by Enron, some Americans must choose among competing electricity suppliers. If you pick the cheap one, does the power go out more often? Who knows? And to access the wonders of the high-speed Internet, heads of household must choose among a cable-TV modem, a DSL phone line and a satellite link.
Having such choices should be a blessing. And we would probably see it that way if we could somehow manage to schedule one gnarly piece of homework at a time--or get some reliable help. What's the answer? Some call for more government oversight. For now, responding to the anxiety in the air, Republicans have set aside their plans for private investment accounts for Social Security. In the long run there is no turning back this age of self-determinism. Sooner or later, your Social Security income will be partly a function of how well you choose stocks--and in many other areas too your choices will make or break you.
Some cope by focusing their research not on the best investments or health plan or broadband provider but on experts to guide them--preferably friends or colleagues, but failing that, professionals paid in a way that puts them on your side, not serving someone else's agenda. The following articles examine three areas in which research is often the most daunting--investing, health care and wiring your home--and offer some helpful resources. So do your homework. The choice is yours.