In Friday's post, "Darkness Falling on the Twilight Years," I highlighted posts from the Economist.com's Free exchange blog and Mish's Global Economic Trend Analysis blog that suggested an idyllic retirement may be out of reach for many Americans.
But that's not the end of it. The same financial woes that will force many people to keep working well into their golden years are also poised to hit them where it hurts -- in their wallets and pocketbooks -- right now. In "$1T Hit to Pensions Could Cost Taxpayers, Workers," The Associated Press gives us the details
Massive investment losses sustained by public pension funds are pressuring state lawmakers from New Mexico to New York to spend more taxpayer money to shore up their programs, boost the retirement age for newly hired government workers and seek more from employee paychecks.
Pensions need $270 billion in additional contributions over the next four years, and more than $100 billion annually for two decades hence, according to the Center for Retirement Research at Boston College.
The pension trouble is just one more economic challenge for states. Income and sales tax collections are dropping fast as unemployment rises. Jobless benefits funds are running dry, requiring federal borrowing. And because of substantial budget holes, states are cutting back on a wide range of services, including child care subsidies for low-income families and aid to public schools, and in some cases laying off workers.