The next great financial crisis is well on its way. States from East to West and all points in-between are facing budget shortfalls and entitlement obligations that are unsustainable.
Included here are some recent stories regarding the looming financial crisis States in the U.S. face in 2011.
On December 19th of 2010, Steve Kroft of 60 Minutes reported on State Budgets: The Day of Reckoning.
On December 4th, 2010, the New York Times printed Mounting Debts by States Stoke Fears of Crisis.
The Wall Street Journal filed When States Default: 2011, Meet 1841 on January 4th, 2011.
(Something I found incredible in this story: there are some bonds that the state of Mississippi issued in 1841 that they still have not paid back. England attempted to collect for a century before giving up.)
To add insult to injury, due to the way states are allowed to report their pension accounting, the crisis could be even worse.
http://www.foxandhoundsdaily.com/blog/dave-roberts/7889-officials-hid-size-of-pension-crisis
You can see your state’s reality number by visiting TruthInAccounting.org and clicking on your state.
What does all of this mean to you? Number one, if your retirement is currently funded or will be funded by a state pension plan, now is the time to make changes to prepare for the likelihood of pension cuts. How deep those cuts might be is a sobering thought.
For those still working towards retirement, the state fiscal crisis is yet another harbinger of higher taxes, lower benefits and increased volatility. Do you have a strategy for it? Our clients do. Contact Devers Financial Group today to learn more.
