Guess what? One hundred years ago, there was no retirement!
The first pensions in the U.S. were started in 1920 with the Civil Service Retirement System. (See Pensions, Wikipedia.) In the 1930′s Social Security was started. Gradually, companies and states began to add retirement to their list of rewards for workers.
However, in most parts of the world, paid retirement is a dream. Older people simply live with their families and cut the cost of their life style.
In the U.S. and Europe, workers have become accustomed to retirement.Â Yet, the cost of retirement is enormous. Â If workers retire at age 60, they can anticipate ten to twenty years of continued life, coupled with rapidly escalating health care costs.
Today, in Europe and the U.S. we are beginning to see how much those costs are.
US Cities Face Half a Trillion Dollars of Pension Deficits
By: Nicole Bullock, Financial Times, published Tuesday, 12 Oct 2010
Big US cities could be squeezed by unfunded public pensions as they and counties face a $574 billion funding gap, a study to be released on Tuesday shows.
“The gap at the municipal level would be in addition to $3,000 billion in unfunded liabilities already estimated for state-run pensions, according to research from the Kellogg School of Management at Northwestern University and the University of Rochester.
Taxpayers in these areas risk not only local tax increases and service cuts to pay for benefits, but potentially some of the bill for the $3,000 billion unfunded obligations at the state level, the researchers say.”
“The fact that there is such a large burden of public employee pensions concentrated in urban metropolitan areas threatens the long-run economic viability of these cities, as residents can potentially move elsewhere to escape the situation,” Mr Rauh said.
We are discussing a short fall of THREE TRILLION DOLLARS! THERE IS NO WAY THAT THE TAXPAYERS OF THESE CITIES CAN PROVIDE THIS QUANTITY OF MONEY TO THEIR RETIRING CITIZENS.
Welcome to reality.