Detroit is now experiencing a case of bankruptcy similar to the country Greece when the population had experienced citizens who were retiring too early. At this time, the city of Detroit is facing bankruptcy due to many years of bad budgeting taking place within the union companies. Some of the issue even came about when early worker retirement began. A union worker places money into a 401K, Individual Retirement Account (IRA) or a mutual fund for his or her retirement from every check. The goal of using one of these choice funds is to allow money to accrue at a percentage so when retirement age arrives there will be a reasonable amount of money to live on.
An issue some union workers have done is retired at an early age. For example instead of retiring at 65, a union worker would retire at 55 instead. By retiring at that early age, it causes devastation to the economy including not allowing the retirement annuity to build a reasonable amount. An option to correct this matter is to retire at a later age. Of every paycheck made, state and federal taxes are removed then used for necessary needs of state and federal budgets. When less employees within a state are working there are less taxes gathered within that state. Hence, that state has less money earned and there will be less money budgeted for necessary departmental needs.