The pension long has been a standard part of retirement for many Americans, particularly for public sector employees like police officers and teachers. Offering a pension -- a set annual income for long-time employees after they retire -- used to help attract quality employees by offering them the promise of financial security in their golden years.
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Does the same hold true today? Private companies rarely offer pensions anymore, and states are struggling with pension commitments they made decades ago. The relative security of a pension is tied to the well-being of the government that offers it, and a great many U.S. states currently have unfunded pension liabilities.
See the five states that are well-prepared to continue funding their pension systems, and the five that might find themselves in fiscal hot water in the near future. Did your state make the list?
The Bottom Five
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5. Texas
Texas had $401 billion in unfunded pension promises in 2020, up $100 million - or 33% -- from 2019. Still, Odessa, Texas, is one of the best cities to retire on a budget of $1,500 a month.
4. North Dakota
North Dakota's $12 billion in unfunded pensions for 2020 is the third-lowest total among all 50 states, but that was an increase of nearly 37% from 2019, the third-largest proportional increase in the nation.
3. Kentucky
The Bluegrass State has $102.4 billion in unfunded pension liabilities. Its per capita rate of $22,914 is the 10th highest in the U.S. A previous GOBankingRates study found that if you retire in Kentucky, you'll need about $663,000, plus your Social Security payments, to fund your retirement.
2. Utah
While Utah's $37 billion in unfunded pension liabilities is larger than only North Dakota's among the bottom five, it's up 52.4% from 2019. It costs $752,895, after Social Security, to comfortably retire in Utah - almost $100,000 more than in Kentucky.
1. New Jersey
With $254.4 billion in unfunded pensions, New Jersey is one of six states with liabilities of more than a quarter of a trillion dollars. It's up more than 29% from 2019.
The Top Five
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5. Louisiana
Louisiana's per-capita unpaid pension liabilities are close to $20,000. Still, the total is less than $90 billion and had a year-over-year gain of less than 9 percent.
4. Washington
The Evergreen State has unfunded pension liabilities of $15,123 per capita for a total of $115 billion. Retirees in Bellevue, Washington, who bought a home there years ago are reaping the benefits now. The city is one of 11 identified in a recent GOBankingRates study where the average home price exceeds $1 million.