State governments have public pensions for their employees

Most pensions are subject to federal income taxes

Those taxes kick in once someone starts taking distributions from their pension. Whether a pension is subject to state income taxes depends on the state and other factors. Learn more about how pensions are taxed in this article.

Some multibillion-dollar pension funds depend on hedge funds

Pensions are responsible for safeguarding the retirement plans of many corporate and government employees alike. Pensions differ from 401(k) plans and sometimes rely on alternative assets, like hedge funds, to insulate their portfolios of billions of dollars from volatility in financial markets. Read the case top pension advisor Cambridge Associates makes for hedge funds.

US pension plan adoption has declined from 1975 to 2021

Pension plans are a form of guaranteed retirement plan for long-time workers, and they were a major part of industries in the mid-20th century. With the rise of the 401(k) and similar tax-advantaged, defined-contribution accounts, these so-called defined-benefit plans have declined in use by employers. Compare US adoption of both kinds in this table.

State and local governments fund very different services

Local governments allocate 39% of their spending to K-12 education, while states allocate less than 1% directly—although much of local education funding actually comes from state and federal grants to local communities. States instead allocate their budgets to public welfare and health programs (45%) and higher education (15%).

Average retirement savings by state

Connecticut residents have the highest average retirement savings per person at $634K, according to data from the retirement plan provider Empower. On average across all states, Americans have saved $498K for retirement. This graphic shows the top ten states with the highest average retirement savings per person. See who came in second to Connecticut here.

Pension plans investing over 60% in stocks had the highest real returns in 2024

In order to ensure that retirees received all the retirement funds a company or other institution may have promised them, pensions were often limited to investing in run-of-the-mill assets like government securities, investment-grade bonds, and blue-chip stocks. But as market conditions have evolved, pensions are increasingly being invested in a wider range of assets, including alternative investments.

Pensions often must ‘vest’ for an employee to be eligible for them

This means that often, an employee won’t be eligible to receive a full pension benefit from an employer until they have worked at the job for a certain number of years. Specifically, these vesting schedules determine when one owns their employer’s pension contributions. The number of years varies significantly by employer.

See how local, state, and federal governments divide the cost of public services

Federal, state, and local governments share responsibility for funding public services. Education, roads, and social programs are funded through a complicated mix of taxes and intergovernmental transfers.

401(k) plans and pensions differ in who has control over the investments

With pension plans, a company contributes to an investment fund from which it distributes regular payments to a retired worker until their death. A 401(k) gives the worker control over contributions in a tax-advantaged account.

Many countries, like Iceland and Norway, offer pensions to elderly citizens

Iceland, Luxembourg, and Norway offer some of the highest annual pension payouts at over 30,000 euros. The below chart shows how European nations stack up in terms of which offer the highest annual pension payouts.

One in seven US tax dollars is collected by local governments

Local governments collect about $886B each year to support education, infrastructure, and public health. Roughly three-quarters of this funding comes from property taxes, with the rest sourced from sales, excise, and income taxes.

Before Social Security, elderly Americans relied on family support, limited state pensions, or company-sponsored pensions

Before Social Security benefits were available to American retirees, they had to find other ways to get by. Pensions were only available to roughly 15% of workers, and most elderly Americans went without meaningful economic security.

The prevalence of 401(k) plans and IRAs over pensions shifted investment risk from employers to employees.

Read a breakdown of each state's pay transparency laws.

Pay transparency laws in the US are evolving quickly, as some states introduce them for the first time and others update existing legislation. This resource has an updated list of key pay transparency legislation in states across the country, as well as general explainers about what each of those laws dictate. Check it out here.

Map of each state's largest tax revenue source

While America’s federal government primarily raises revenue through personal and corporate income taxes, it's a different story for each of the 50 states. This map shows how every state raises tax revenue for government activities. New York and California, for instance, raise most of that money through personal income taxes, whereas Texas and Florida have sales tax as their largest sources of tax revenue. Click here to see the map.

Explore the most common jobs for Americans, broken down by age and gender.

Social Security trust funds are expected to be unable to pay full benefits by 2035

Most US workers have 6.2% of their gross paycheck taken out for Social Security. The government requires employers to match that 6.2% as well, for a total of 12.4%. This video dives into the specifics of how Social Security functions from a financial perspective.

Roughly 22% of US tax dollars go to Social Security

Social security is the US government’s largest expense. You can see other government expenses in a visual breakdown of what one US tax dollar actually pays for. Total spending amounts were converted to cents on the dollar and percentages.

Many states offer a tax deduction for investing in their 529 plans

Different states offer different types of 529 plans (prepaid and savings), and they can require different minimum contributions. While some states offer tax deductions for residents who invest in their state’s plan, investors can choose to use a different state’s plan instead.

Local governments are responsible for more than 148,000 public water systems across the US

From large municipal utilities to small rural systems, local governments are tasked with providing clean water to almost every American community. The US operates over 148,000 public water systems.

Alaska's sovereign wealth fund pays people to live in the state through an annual dividend

While the US doesn't operate a federal sovereign wealth fund, several states run SWFs—the most well-known being the Alaska Permanent Fund. Unlike most SWFs, the Alaska Permanent Fund sends cash payments averaging roughly $1.2K each directly to Alaskan residents each year.

Police spending is one of the largest budget items for local governments

Local governments finance most of the costs for police in the US. Total state and local criminal justice spending—covering police, courts, and corrections—reaches hundreds of billions of dollars annually.

The federal government sent roughly $1.1T to state and local governments in 2024

Federal grants support a large portion of state and local budgets, funding Medicaid, infrastructure, education, and housing. In FY 2024, these transfers made up about 16% of total federal spending.

Public school districts are subsidizing housing for their teachers to combat the growing nationwide teacher shortage.

Pension funds' allocations to risky, alternative investments increased by 25% between 2001 and 2021

The portion of pension funds' risky investments, including alternative investments such as private equity, increased from 14% in 2001 to 39% in 2021. Analysts say private equity investments have delivered higher returns than traditional assets like stocks and bonds. Increased investment in private equity has also given pensions a way to recover from the 2008 financial crisis without necessarily investing more money.

Poverty rates by US state

As of 2022, 37.9 million people in the US were living in poverty. But those people aren't evenly distributed among the 50 states. Some states and regions of the country are more impoverished than others. For instance, US poverty rates are relatively higher in the South than they are in the North. See the state-by-state breakdown with this map.

US state economies compared to entire countries

This map compares US state economies by their gross domestic product to that of a similarly sized country. For instance, California has the largest state economy in the US, with a GDP nearly equal to that of India, the fifth-largest economy in the world. Click here to see how the rest of the states compare.

Visualizing US state taxes in seven charts

Ever wondered how your state’s tax system compares to others? Here’s an overview of the US state tax system based on seven visualizations.

When a pension holder dies, payments are sometimes passed on to a relative

Those relatives are often the pension holder’s surviving spouses or dependents. This article offers tips from a financial expert on how to make sure your spouse is taken care of during retirement, including navigating a pension’s ultimate destination.

US public K-12 spending topped $857B in 2024

Public K-12 schools spent around $857B in 2024, averaging $17,277 per student. State and local sources shouldered nearly 90% of costs, and federal funds provided about $2,400 per pupil.

Police officer salaries vary dramatically depending on where officers serve

Officer pay varies significantly across states and cities, with the highest salaries in California, New Jersey, and Washington. Factors such as local funding, cost of living, and collective bargaining agreements influence compensation.

The 10 best US states to retire in, ranked

Out of all 50 states, Delaware was recently deemed the number one state for a happy retirement. That ranking is based on a few factors, including weather, affordability, healthcare, crime, and more. Want to know what other states ranked in the top 10 as of 2024? Click here to find out.

Use this calculator to find out the programs and services your federal income taxes fund.

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The most taxed states in America

Some states in the US have higher taxes than others. Hawaii, for instance, has the highest total tax burden in the country at 13.9%, whereas Alaska has the lowest overall tax burden at 4.9%. New York has the highest individual income tax burden; and eight states have no individual income tax. See a map of the most-taxed US states here.

Nearly 1 in 4 Americans over age 65 is still working

While many of these Americans are often working part-time, the share varies significantly by US state. While roughly 29% of those over the age of 65 work in Vermont, only about 17% do the same in West Virginia.

27 states have right-to-work laws

That means employees in those states can choose whether or not to join a union at their workplace. Right-to-work laws also make it optional for employees in unionized workplaces to pay fees associated with union membership.

Federal systems are a minority among the United Nations' 193 members

Of the United Nations' 193 member countries, roughly two dozen use a federal system, dividing power constitutionally between national and subnational governments. This group includes the United States, India, Canada, Germany, and more. The video walks through examples of how these states operate.

The average retirement age by country, visualized

In the US, the average retirement age was 64 as of 2020. The Organization for Economic Co-operation and Development projects a two-year increase in the average retirement age by the mid-2060s.

Social Security is one of the most popular government programs

In a recent Pew Research Center survey of US adults, 79% said Social Security benefits shouldn’t be reduced in any way. This view is broadly shared across ages, races, political affiliations, and income brackets.

See which states contribute the most and least to the federal government.

Federal government supports—but doesn't run—K-12 schools

The Department of Education contributes about 8% of K-12 funding and administers targeted grants, civil‑rights enforcement, research, and data collection. Crucially, it is legally prohibited from directing curriculum, personnel decisions, or instructional content, leaving that control to states and districts.

Nearly 70% of the US government's debt is domestic.

Visualize America's retirement savings by age, with the median retirement savings for Americans being $87K as of May 2024.

The hardest US states to save money in, mapped

According to data from Bankrate, Tennessee ranks as the easiest state in the US to save money, while Hawaii is the most difficult for those attempting to build a savings fund. This map of the US shows where all the states rank in-between. Some may surprise you. See the map here.

Most US fire departments are staffed entirely by volunteers, though they tend to serve smaller communities

According to the Federal Emergency Management Agency's 2024 registry, 70% of US fire departments are all volunteer, while 9.5% are fully staffed with paid employees. Volunteer departments are mainly found in rural and suburban areas, whereas most urban Americans are served by career or mixed departments.

American local government comes in five distinct forms

Counties, municipalities, townships, special districts, and school districts are each created for a different purpose, operating under different rules, and answerable to the state in different ways. Special districts, the least known of the group, are created for specific purposes, such as transit or fire protection.

National parks, explained

Roughly 83 million acres of the United States are set aside as federal National Parks land, an area large as Germany. From the original Yellowstone Park to small monuments and memorials, learn the essentials on this portion of America dedicated to public enjoyment and recreation with our quick explainer video.

The United States is the world's oldest continuously operating federal system under a written constitution

The US pioneered federalism in the late 18th century, and many countries later adopted federal systems to manage conflict and share power. This resource features interactive maps that trace the spread of federal systems worldwide from 1900 to the present.

Only half of American workers have retirement accounts, like 401(k) plans, through their current jobs.

Many local governments also struggle to rein in their spending.