One financial area not receiving media attention in our present economic situation is the large deficits in federal, state and local retirement accounts.
In fact the silence is almost deafening.
According to the Pew Center on the States, "state government employee pension plans nationwide alone, have racked up nearly $360 billion in unfunded pension liabilities.
" Research indicates there is also in excess of $380 billion in unfunded liabilities for other retirement benefits, including health care.
Both political parties have blamed unfunded pension liabilities on factors outside their control, such as lost tax revenue and the stock market downturn.
Sagging returns have not helped pension investment portfolios, but they account for a fairly small portion of the problem.
Many states have been diverting billions in pension payments to other state spending year after year, digging the hole deeper.
Politicians and administrators at all levels of government have "guaranteed" generous benefits, while pushing the costs onto future generations of taxpayers by failing to fully fund the pensions.
The Congressional Budget Office estimates that in the past 15 months, and most notably in the past few months, employee retirement accounts have lost $2 trillion in value.
By law, the trillions lost in public pension obligations must be paid out...
and taxpayers will be forced to foot the bill.
While on vacation last spring in the Napa wine country of California, my wife and I listened in disbelief as the local news announced that the city of Vallejo had filed for bankruptcy.
This was as a direct result of the more than generous retirement benefits paid to its employees.
We should not have been surprised as the same thing has happened in the past in Orange County and San Diego.
Many other municipalities across the nation are facing this same scenario.
It will be interesting to see how this plays out with States needing billions just to keep operating day to day and the millions of government employed baby-boomers getting ready to retire.
With the high unemployment, personal debt running at an all-time high and high personal and property taxes, where will the states get the money to pay retirees? Where will the federal government get the funds to satisfy social security, Medicare and the unfunded retirement obligations? There does not appear to be a definitive or even an estimated amount that the federal, state and local governments are short, in funding retirement accounts.
The collective figure is definitely much bigger than the stimulus package just past and signed into law.
Add to the government shortages those of the private sector, the future does not look good for those retired or thinking of retiring.
If you are retired or planning to retire in the next few years, contact the agency or your retirement account administrator; find out what condition the funding is in with regard to future retirement disbursements.
This may put your mind at ease or cause you to save more of "your money for your retirement.
" Additionally, you should contact your local, state and federal representatives and communicate your concern.
Possibly suggest they do not pass more spending bills until all unfunded liabilities are covered.