The Illinois pension fund is a mess. There is a real chance that people will not receive the retirement money that the state had promised them. In lieu of problematic pension funds across the country, is it safe to trust someone else on building your retirement fund?
The Illinois Pension Problem
For some people the aspects of having job that offers a pension can be a career deciding factor. In theory, pensions are a great source of retirement income. Older pensions, and still quite a few existing pension offers are written so that they provide a pretty generous fixed amount of income during retirement. That being said, the pension system across the country is a hot mess. Some people make more than they did in their actual profession with pension funds. Across the country states have guaranteed yearly retirement funds to people that just simply don’t exist.
You Shouldn’t Put Your Retirement In Someone Else’s Hands
Retirement is a tough thing to save for. There’s no doubt that as wages have largely stagnated over the last couple of decades and as household debt has increased, it’s going to be harder to for people to save for retirement. State and Federal employees have looked to pension funds to their source of retirement. But I’m about to tell you, people should be extremely nervous about the future of your pension fund. Let’s take the state of Illinois as an example for what’s likely to start happening in the rest of the country.
The Illinois Pension Debacle
- The state’s pension system is failing miserably. There are $130 billion in unfunded pension obligations.
- The state currently has a list of unpaid debts totaling $13 billion.
- The state literally can’t afford to pay people what their pensions say they’re entitled to.
- A judge ruled that the pensions MUST be paid what’s promised to people and the state can’t back out of that.
- 100% of the state’s entire budget is going to pension funds and debt. That means there’s nothing to go to any discretionary spending.
Why The Illinois Pension Issue Matters
There is a real chance that Illinois simply won’t have the money to pay people their pensions. The problem is also foretasted to become far worse in the next handful of years as more people become eligible for pensions. Illinois probably the best state to look at (besides California) when it comes what not to do with a state budget. Regardless of that, there are several states out there that are being entrapped in the pension issue.
What happens when people are told they won’t have they money they were promised?
The answer to that question is a scary thought to consider. Especially if you’re one of many people who have been looking at the state providing their retirement income. Just for the record, according to the Illinois Policy, most public school teachers don’t pay into their own pension systems as required by the state. Instead, many school districts pay the teacher’s portion instead. That being said, who are you looking at to guarantee your retirement? Yourself or someone else?