Greenspan's remarks echoed warnings he has given many times before, though his statement yesterday was made in more oblique language. Earlier this year, he made a far more forceful statement on Capitol Hill about the need to restrain the growth in Social Security and Medicare spending by reducing benefits for future retirees.

Those remarks prompted a barrage of criticism, in large part because of the sensitivity of the topic in a presidential election year.

Greenspan's comments about the long-term economic peril of the nation's retirement system came on a day when a key short-term economic indicator also took a downturn.

Weaker growth

The Commerce Department lowered its estimate of economic growth for the second quarter of this year to a 2.8 percent annual rate from its earlier projection of 3 percent. The reduced figure marks the slowest expansion of the country's gross domestic product in about a year and reflects the effect of higher oil prices and sluggish consumer spending.

Greenspan, who headed the 1983 commission that recommended several ways to bolster the Social Security program's finances, did not urge any specific benefit changes. But he did note that a variety of amendments in both federal programs and Americans' retirement and saving behavior could ease the "adjustments" that will have to be made as the population ages.

Americans, for example, could work longer, said Greenspan, 78, who has served as Fed chairman for 17 years. They are living longer and are healthier than earlier generations. Work is "becoming less physically strenuous but more demanding intellectually," he said. Yet workers have been retiring at younger ages in recent years.

One way to encourage workers to retire later, he suggested, would be to raise the age of eligibility for full retirement benefits or to slow the growth of Medicare benefits.

Should save more

Americans also should save more, both as individuals and as a nation, he suggested. The individual saving rate is less than 2 percent, and the nation borrows an amount equivalent to about 5 percent of its annual gross domestic product from overseas to finance its spending and investment.

Without greater savings, he said, the country will not have the money to invest in the new technologies needed to continually boost worker productivity or output per labor hour.

Rising productivity, he said, "offers the greatest potential for boosting" the economy's resources "to a level that would enable future retirees to maintain their expected standard of living without unduly burdening future workers."

Retirees tend to save more, he said, expressing hope that the large post-World War II baby boom generation will do the same.

Thrift by government

Greenspan also implicitly urged actions to reduce the record federal budget deficit, saying "federal government saving" will be "critical to national saving."

"Unless actions are taken," he said, without specifying, the deficit will become far worse as the share of the American population over age 65 grows from about 12 percent today to around 20 percent by 2035.

Greenspan also repeated his call for the nation to "engage in a long overdue upgrading of primary and secondary school education" as another way to enhance productivity.

"The relative aging of the population is bound to bring with it many changes to the economy of the United States — some foreseeable, many probably not," Greenspan said.