from The Rich Dad Channel
States with the worst pension fund shortfalls include Colorado, Connecticut, Illinois, Kentucky, and New Jersey which have less than half of the assets needed to pay promised benefits and another 17 states have less than two-thirds. The extent to which public pensions are underfunded has been obscured by governmental accounting rules, which allow pensions to eliminate their underfunding, no matter how large, simply by investing in risky assets. In fact, investing in riskier assets may allow a pension to raise investment assumptions, but it also increases the probability that existing underfunding will increase.
It’s anyone’s guess what will happen if and when a state pension in the United States runs out of money, but it’s indisputable that the amount of money that will be needed to bail out a single failed U.S. state pension will be in the tens of billions.
All public pension stakeholders—American taxpayers and pensioners—need to get educated fast as to the causes of coming pension collapses and learn what they can do about it now.
Listen as hosts Robert and Kim Kiyosaki and their guests Ted Siedle and Chris Tobe discuss how what’s happening in Kentucky can happen anywhere in the United States.