Let’s face it: For many people, saving for retirement isn’t easy, and it’s getting harder. If you think you’re safe because you have a pension, think again. A huge shortfall globally means millions of pensions aren’t safe. The United States is more than $6 trillion short of where it needs to be right now and is tracking to be $137 trillion short by 2050. Every state has pension shortfalls, but some are worse than others. These are the 15 states making America’s pension crisis worse.
Research from the American Legislative Exchange Council shows just how bad the situation is for public pension plans around the country. Looking at the investment return assumptions used by states, ALEC calculates how much the promised pension amounts exceed current assets to arrive at the shortfall. States with larger populations have more public employees and more pensions to fund, but we’ll visit a small state with a big problem (page 4) and two medium-sized states with more than $350 billion in shortfalls (pages 12 and 13).
15. Colorado
Pension shortfall: $118.3 billion
Population: 5,607,154
There are fewer than 500,000 people taking pensions in Colorado, but the state has one of the biggest shortfalls in the United States. The state is more than $118 billion in the hole in total, thanks in part to paying out twice as much from the pension fund as it takes in
Next: A state that’s virtually a replay of Colorado.
14. Minnesota
Pension shortfall: $118.7 billion
Population: 5,576,606
Minnesota is basically a carbon copy of Colorado, the state we just visited. The populations and pension shortfalls are about the same in each state. Minnesota is a little better off with its $118 billion shortfall paired with close to 600,000 public pensions, but it’s still one of the states making America’s pension crisis worse.
13. Washington
Pension shortfall: $120.5 billion
Population: 7,405,743
Washington runs 10 state-level pension plans, and there are another 50 plans at the local level. When you put it all together, the state would come up $120.5 billion short if it had to pay out all of its 429,599 public pensions.
See the remaining 12 states at CheapSheet: The 15 States Making America’s Pension Crisis Worse | CheapSheet