A recent American Enterprise Institute forum addressed an important issue when it comes to retirement, says Steve Vernon a research scholar for the Stanford Center on Longevity: have we got a crisis, or merely a series of hard problems?
The news media is full of reports that we are woefully unprepared financially for retirement. But panelists said that some of these reports have overstated the difficulties.
"Is it really a crisis if people who are fully capable of working must continue to work in their late 60s or early 70s to make ends meet?" Vernon writes in a column on CBS Moneywatch.
"Or if they must wait to start Social Security benefits until their late 60s or age 70? Or if they're forced to accept a reduced living standard in retirement?"
Maybe the issue should be defined differently, Vernon says. "Perhaps this situation merely represents a hard problem with unfortunate consequences, the result of a host of circumstances ranging from inadequate planning and saving for retirement to simple bad luck?"
Elsewhere on the retirement front, you're surely aware of the woes of state pension funds, as mushrooming retirement benefits far exceed state revenue, but the exact numbers are staggering.
The shortfall between the benefits state governments have promised to their workers and the money available to meet those obligations totaled a whopping $968 billion in 2013, up $54 billion, or 6 percent, from 2012, according to a study by The Pew Charitable Trusts.
The data "don't fully incorporate the strong [financial-market] returns of recent years" for pension funds, the report states. But state pension funds are still in a world of pain.
The cumulative state pension debt will likely stay above $900 billion—and rises above $1 trillion when local pension shortfalls are included, according to the study.
"State and local policymakers cannot count on investment returns over the long term to close this gap and instead need to put in place funding policies that put them on track to pay down pension debt."
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