Economics editor Chris Farrell
Economics editor Chris Farrell - 
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Tess Vigeland: There's a lot of talk these days -- not just in Wisconsin, but in states around the country -- about the need to tamp down on public employee wages and benefits. Part of an effort to close budget deficits. The public policy stakes are high. But commentator Chris Farrell says the debate carries a message for all of us.

Chris Farrell: Want to know my takeaway from the escalating turmoil over public employee benefits and contracts? Everybody just has to save more. A lot more -- say, at least 20 percent of your income.

Like it or not, it's the only conclusion from the ominous arithmetic of an aging population plus a fraying retirement savings system.

All over the country, governors and mayors are in a mud-wrestling match with public employees. There is a gap between pension assets and the benefits that were promised, which some -- like the folks at the Pew Research Center -- say could total at least $1 trillion.

The financial meltdown laid bare what many experts have long known: Too many state and local governments routinely underfunded their pension plans while hiking benefits. Going forward public plans, are going to get a lot less generous, especially for new hires.

But we're not just talking government plans here, either. Corporate America is facing its own crisis. Three decades after its launch, the 401(k) is falling far short of its promise of a safe, secure retirement. Despite strong gains in the stock market, retirement portfolios have been damaged by two bear markets and two recessions in less than a decade.

And if you're thinking you can always count on Social Security and Medicare -- forget it. As Republicans and Democrats battle over how to reduce the federal budget deficit, eventually, they'll get to Social Security and Medicare. The programs will be less generous.

Add it all up and it seems that all of us will have to save more for our old age. There are signs that we're on the right savings track. Government statisticians say the personal savings rate was above 5 percent at the end of last year; in 2005, it was less than 1 percent. And the Federal Reserve tells us that consumers have reduced their credit card debts by 16 percent from the 2008 peak. And lots of people managed to do it without a pay raise.

But it isn't enough. The new arithmetic of retirement is that we're going to work longer and save more. So, don't wait. Start now.

Vigeland: Chris Farrell is the economics editor for Marketplace.

Follow Chris Farrell at @cfarrellecon