Greenspan: Benefit Cuts Necessary -- This is Only Short Term!!

The Issues of Baby Bloomers retirement is a big concern especially 2008 onward. Which by then; those born on & after 1948 would be retired.

In my opinion, Looking at the retirement Benefit cuts is only for short term.

The other issue that all would be facing is the decline of the Social Security contributors of the X Generation & Web Generation.

Now looking at the life span of Baby bloomer's say would be at 100-110. Then there would be even greater financial payout & social issues for these Baby Bloomers.

You see our parents are living till 70th-90th years old which there is a growing base of Baby Bloomers to support their retirement. However, these Baby Bloomers like us have the contracture pool of Social Security funds to support. Couple witht he cost of living & inflations. the social security funds would not be enough for the minimum life style that we used to live on.

Therefore, for the long term the only solutions is:

To extend the retirement age till 75th - 80th years old for the baby bloomer's

Further the research on Nanotech applications to sustain the health & wellness conditions for people, so that Baby Bloomers would have a extended middle age & fighting fit life to self-support of their life & country economy.


Greenspan:Benefit Cuts Part Of Soc Sec Solution
March 15, 2005
By Rob Wells and John Godfrey Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- Federal Reserve Chairman Alan Greenspan said Tuesday Congress should plainly explain to taxpayers that benefit cuts are likely to occur under any plan to restructure Social Security.

Greenspan, in prepared remarks before the Senate Special Committee on Aging, cited the estimated $10.4 trillion unfunded liability for Social Security over the indefinite future. The problem is worse with Medicare, where that program's shortfall is "several multiples" of the Social Security deficit.

"These numbers suggest that either very large tax increases will be required to meet the shortfalls or benefits will have to be pared back," Greenspan said.

"Because benefit cuts will almost surely be at least part of the resolution, it is incumbent on government to convey to future retirees that the real resources currently promised to be available on retirement will not be fully forthcoming," Greenspan said.

Greenspan added that tax hikes would be "problematic" to close the financial gap within Social Security.

Greenspan spoke about the need to evaluate promises to retirees.

Failure of Congress and the administration to address the imbalances between our promises to future retirees and society's ability to meet those promises "would have severe consequences for the economy."

"Unless the trend is reversed, at some point these deficits would cause the economy to stagnate or worse,"he said.

He also discussed the need to build savings to benefit the broader economy.

"When we evaluate our ability to meet those promises, focusing solely on the solvency of the financial plan is, in my judgment, a mistake," he said.

"In addressing Social Security's imbalances, we need to ensure that measures taken now to finance future benefit commitments represent real additions to national saving," he said.

He again endorsed the notion of personal investment accounts within Social Security.

President George W. Bush has proposed to allow workers born after 1950 to invest up to 4 percentage points of their Social Security payroll taxes into stocks and bonds through new private investment accounts. This will require the Treasury to borrow $754 billion over the next decade to finance the transition costs to the new system.

Greenspan said there are a variety of options to constructing private accounts. "Some types of accounts are virtually indistinguishable from the current Social Security system," he said.

On the other hand, accounts that do transfer funds to the private sector could force Congress to act to solve the nation's long-term fiscal problems.

"The major attraction of personal or private accounts is that they can be constructed to be truly segregated from the unified budget and, therefore, are more likely to induce the federal government to take those actions that would reduce public dissaving and raise national savings," Greenspan.

One way to help Social Security's solvency would be to divert current Social Security surpluses into accounts dedicated solely for the retirement program. Last year, for example, Social Security tax revenues exceeded benefits by about $150 billion.

But setting these funds aside just for Social Security would have exacerbated the current federal budget deficit, Greenspan said.
-By Rob Wells and John Godfrey, Dow Jones Newswires; 202-862-6601; John.Godfrey@dowjones.com

Smartmoney.com: Breaking News: Greenspan: Benefit Cuts Necessary