Iowans who are 50 years old now will likely only get around three years of full Social Security benefits when they retire, according to the latest projections. Beyond those three years, benefits will be cut by a quarter.
Iowa Senator Chuck Grassley says estimates now show that without Congressional action, the program will exhaust its cash reserves in 2033.
“You can only pay out what’s coming in if the reserves are used up,” Grassley says. “By 2033, the two-and-a-half trillion dollars of reserve, that’s being drawn on right now, will be used up. Then, the cash flow will be 75% of what the benefits are now.” While the program’s parameters haven’t changed much in 80 years, Grassley says the worker-to-retiree ratio has declined significantly. The need for decisive action by Congress is becoming all the more vital, he says, as the years go by and as more Baby Boomers retire.
“Congress has an obligation to find bipartisan solutions to strengthen and improve Social Security for generations to come,” Grassley says. “We also have an obligation to fight fraud. Every dollar that goes to waste, fraud and abuse robs the program and its beneficiaries.” Grassley joined officials with AARP-Iowa on Friday of last week to mark the 80th anniversary of the Social Security program.
“Generations of Americans have been protected against poverty, thanks in large part to the Social Security safety net,” Grassley says. “It is one of the three legs of the retirement stool, along with personal savings and pensions.”
Grassley says he’s had no indications President Obama is willing to work with Congress on a new Social Security package and says he’s “doubtful” anything will be done this year or next year. “Hopefully, a new president will do something,” he says.