underfunded adj having or provided with insufficient funding Examples: 1. You come to the end of the month and it is time to make the rent payment. You look at how much money you set aside for the rent, ask your sister for another loan and receive it, you raid the piggy bank - and you are still short. or 2. a retirement or pension fund looks at the value of its investments, how old the people are who may retire, figure out how many will die before they retire, how much it will have to pay each month to each person when he/she retires (all this is the work of a person called an actuary). Then you estimate the rate of return you expect to receive on your investments until the day of reckoning (like the 7.75% annual return that I showed you - and which the retirement fund managers are not currently earning on the investments). If your figures come up short, you are underfunded. 3. Remember the old joke about the guy who falls off the Empire State Building - gee I just passed the 35th floor and I am not dead yet! Same thing applies to funding of retirement benefits, an insurance company having money in the bank to pay health care claims as they roll into the company, you paying your bills as they come due. The problem is that people don't understand that they are in trouble years in advance if they do not do the proper funding. Your Congress voted to take the social security reserves and spend them for current programs many years ago. Few people outside of actuaries got their panties in a wad because the concept of underfunding is not understood until the bills come due. This applies to phds as well. I have a relative who retired two years ago, spent $75,000 on a daughter's wedding this year (and he borrowed for it), his wife is retiring next year, he cosigned for $250,000 on another daughter's student loans, just refinanced his house, and is driving 200 miles roundtrip to a football game with a friend next weekend. And, he was sweating the refinance of his house because he wouldn't be able to make the current payments if the refinancing wasn't done.