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Retirees Should Expect `Woefully Inadequate' Social Security Benefits, CU Expert Says

MADISON, Wis . - Federal Reserve Board Chairman Alan Greenspan's recent suggestion to cut Social Security benefits spawned a wakeup call to not only the 77 million Baby Boomers who stand to be impacted, but for everyone looking forward to financially sound retirement. Greenspan said that by eliminating Social Security...

By Michelle A. Samaad | Updated on March 09, 2004

MADISON, Wis . – Federal Reserve Board Chairman Alan Greenspan’s recent suggestion to cut Social Security benefits spawned a wakeup call to not only the 77 million Baby Boomers who stand to be impacted, but for everyone looking forward to financially sound retirement. Greenspan said that by eliminating Social Security benefits for those close to retirement, the $521 billion federal budget deficit could shrink significantly. His suggestion was met with widespread criticism. “There’s a fear factor that is generated any time there’s talk of doing away with Social Security,” said David Hunter, member services officer for CUNA Mutual Group’s MEMBERS Financial Services. “If anything, it should get members thinking that even if (benefits) are there, they will be woefully inadequate” Citing industry figures, Hunter said retirees received an average of $902 in Social Security each month in 2003 and half depended on the benefits as the main source of income. Hunter said it goes back to the three R’s: reevaluation, rebalancing of financial assets when necessary and reallocation of those assets when needed. “Security selection is not as important as asset allocation. Proper asset allocation and time – not timing – are proven pillars of investing,” he emphasized. Greenspan warned the federal deficit could worsen dramatically when the first wave of Baby Boomers become eligible for benefits in four years. “This dramatic demographic change is certain to place enormous demands on our nation’s resources – demands we will almost surely be unable to meet unless action is taken,” Greenspan said in a statement. “For a variety of reasons, that action is better taken as soon as possible.” Industry experts note that it is highly unlikely that Congress will heed Greenspan’s warning during this election year. [email protected]

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