Social Security Chief Actuary Stephen Goss warned a Senate panel today (5/21) that benefits could be cut by 25% if Congress does not act soon. "Changes are needed soon to avert trust fund reserve depletion and an abrupt reduction in the level of benefits," Goss stated in prepared remarks to the Senate Finance Committee.
Goss said that the primary factors leading the shortfall issue in the reserves includes:
- Longer lives,
- The huge baby boomer population coming into retirement, and
- A permanent decline in the historic birth rate from three children per woman to two after 1965, which has, in turn, led to a lower ration of employed workers to support retirement benefits.
After the hearing, Finance Committee Chairman Sherrod Brown indicated that he doesn't believe it is imminent that Congress will approve adjustments to boost the trust fund.
It is for these reasons that we have been predicting a 50% cut in Social Security benefits in the retirement projections we are preparing for pre-retirees. Buckle up and stay tuned folks as we aren't convinced this is over yet!!