I can’t add much to this story in the New York Times, except to say you really should be concerned. Other than the fact the federal government can print money (and generate inflation) this story is a reflection of the US condition in general. Note the significant role pensions and the funding games played by politicians have in contributing to the crisis.
And here is more from the Wall Street Journal on the growing pension crisis in many states and how it may affect you no matter where you live. But hey, all we have to do is apply progressive fiscal measures to this coming crisis and raise taxes on the wealthy to solve this problem too.
And by the way, the chances are that you do not even have a pension, but rather rely on a 401(k) or IRA. How is that working out for you? Don’t forget as politicians attempt to solve this or that crisis they created by policy or politics you will foot the bill making it even harder to fund your own retirement.
Just to give you a frame of reference of how much money you will need, take the amount of income you will need in retirement and multiply it by 25. That calculation is a good rule of thumb for determining the lump sum you will need to live on during the typical retirement starting at age 65. So, if your family income is now $60,000 a year you will need $1,500,000, and no, your living expenses will not decline so that you can live on 70 or 80% of your income while you were working.
- Illinois public pension fund crisis worsens (chicagonow.com)
- How a Pension Crisis is Created: One Bad Decision at a Time (reason.com)
- NYT: Rising state debts stoke fears of crisis (msnbc.msn.com)
- California Pension Crisis Watch: University of California Edition, or, Paying Nothing Into a Pension Plan Can Make It Harder to Get Anything Out (reason.com)