INVESTOR IN THE FAMILY Radio
INVESTOR IN THE FAMILY Radio

102 Barron's - Why Broke Old People Can't Stop Working

October 17, 201612 min
Overview Boomers staying in the workforce even as labor-force participation rate is at lows not seen since the 1970’s Many working out of necessity: Still supporting adult children No retirement nest egg Public sector employees are immune to this problem, right? The payoff of “generous, assured pensions” may not be so certain Moody’s says that state pension plans were short by around $1.25T at the end of 2015, which amounts to around 119% of state revenue The gap is expected to grow in coming years as plans’ returns have fallen far below their 7.5% annual target (earning 0.52% instead in 2016 despite rallies in stocks and bonds) Moody’s calculates the poor performance of pension plans will grow the shortfall to $1.75T in 2017. The states with biggest gaps are Illinois and New Jersey Some assert that policy makers would not allow for a potential recession as a result of a state and local pension funding crisis. As a result, the federal government would swoop in and to backstop th

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