Every day, an estimated 10,000 Americans baby boomers retire — and unfortunately many of them will spend their golden years pinching pennies. According to a recent estimate released by the U.S. Government Accountability Office, nearly half of all Americans 55 and older have no retirement savings.
Still, despite having no retirement savings, many retirees are expected to be relatively financially secure over the course of their retirement. In addition to monthly Social Security payments, millions of older retired Americans — including former teachers, firefighters, police officers, and other state and local government employees — are also expected to receive pensions.
According to the U.S. Census Bureau’s 2017 Annual Survey of Public Pensions, state and local governments contributed $144.6 billion to employee pension programs in 2017. Not all states, however, spend equally on retirement programs.
24/7 Wall St. reviewed annual pension fund contributions at the state and local level to identify the states that are spending the most to fund their residents’ retirement. States are ranked based on total 2017 pension fund contributions per current state and local government employee.
The states spending the most per public sector worker do not necessarily have greater than average public sector employment. In fact, Alaska and Hawaii are the only two states in the top 10 on this list to also rank among the 10 states where the most people work for the government. Here is a full list of states where the most people work for the government.
While public pensions are a financial lifeline to millions of Americans heading into retirement, they are costly — and most state pension systems are woefully underfunded. In 20 states, less than two-thirds of pension obligations have adequate funding. Some of the states spending the most on retirement in 2017 also have the largest funding gaps to close. Here is every state’s pension crisis, ranked.