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."
Elsewhere on the retirement front, many Americans who graduated from college this spring are now starting jobs that pay them enough to begin putting something away for retirement.
Mike Sorrentino, chief strategist at Global Financial Private Capital, has several tips
to offer these millennials to ensure adequate savings for their golden years.
- "Invest in equities," he writes on MarketWatch. Recent college graduates should place all of their savings in stocks, Sorrentino advises. And why? "Equities have delivered an average annual return of 10 percent, which is the largest of any major asset class."
- "Buy index funds." You're probably aware that investment legends Jack Bogle, founder of The Vanguard Group, and Warren Buffett, CEO of Berkshire Hathaway, agree. "Active management of a stock portfolio requires skill, education, and experience," Sorrentino notes. "Younger investors have none of these, and those who try will be doing nothing more than speculating."
- "Never buy the company stock." Doing so makes you overly dependent on your company for your financial well-being.
© 2021 Newsmax Finance. All rights reserved.