Kentucky

For anyone making under $50k a 401k is a poor replacement for a pension. But even a modest pension is not enough. Most people, even the rich, seem to have a poor understanding of financials in general. That probably starts with our education system, which if you're lucky will go over basic finances of a monthly budget. Any financial person will tell you the three stool legs of retirement are social security, your tax deferred IRA/401k and personal savings. The fact that most Americans have less than $50k in a retirement plan when they reach their 40s and 50s is scary in my book. As a gen Xer, I almost have a morbid curiosity about what will happen in the next couple of decades as my generation reaches ages where they can no longer work and don't have the resources to meet basic living costs.

Back to pensions, it's my opinion that most states have created a "crisis" by poor planning but also for allowing the "standard" rules of pensions to get them into situations where they are chasing 10%+ returns (high risk) and pushing ungodly amounts of money into the pension systems that starve basic operations and piss off the electorate thus making it easier to kill state pensions without returning the savings to the workers who will now be responsible for paying for their own retirement with their meager salaries. My state's pension system never seamed to have a cash flow problem until one used the pension formula to estimate future solvency. As I said before, NO ONE can predict with any accuracy what any pension fund's solvency will be 10 or more years out; is the "crisis" manufactured or real? The same goes for anyone else. Try and predict how much money you will actually be spending any given month in your 75th year. Go ahead and write it down (now) and see how close you are, I dare you. I'll guarantee that your prediction will be wrong. Hell I'll give you 100 chances and I bet none of them would be right. This is a fools errand and we've let the financial people and the politicians abandon a system that at least gives people a chance to live in dignity in their later years.