(Sudden) Jump in Life Expectancy Assumptions Drives Latest Social Security Projections

[Hannah Bell]

Social Security projected to run a surplus of $69 billion in 2011.


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The 2011 Social Security trustees report is far more optimistic about life expectancy than last year’s report. It projects that men who turned age 65 in 2010 can expect to live another 18.6 years compared with the 18.1 figure projected in last year’s report. Life expectancy for women at age 65 was projected at 20.7 years in the 2011 report, compared with 20.4 years in the 2010 report.

This assumed increase in life expectancy is the largest factor in a projected deterioration in the program’s finances. The shortfall expressed as a share of payroll over the program’s planning horizon is 2.22 percent, compared with 1.92 percent in the 2010 report. Expressed in dollar terms, the projected shortfall over the 75-year planning horizon is $6.5 trillion or 0.7 percent of GDP.

It is interesting to note that while the Social Security Trustees assume a big jump in life expectancies for retirees today compared with their assessment last year, they actually assume less progress in future decades. The 2010 Trustees report assumed that between 2010 and 2080, life expectancy at age 65 for men would increase by 4.2 years and by 4.1 years for women. By comparison, the 2011 report assumes an increase in life expectancy over this period of just 4.0 years for men and 3.9 years for women.

By having more improvement in life expectancy now and less in later years, the near-term finances of both Social Security and Medicare look somewhat worse. The date at which Social Security is first projected to face a shortfall is 2036 in this report compared with 2037 in last year’s report. Medicare is first projected to face a shortfall in 2024 in this year’s report as compared to 2029 in last year’s report, even though the shortfall expressed as a share of payroll increased by just 0.13 percentage point.

At present, both programs are still running annual surpluses. Social Security is projected to run a surplus of $69.3 billion for 2011 as interest plus dedicated taxes exceeds benefit payments. This includes $105.4 billion that is being credited to the trust fund from general revenue to offset the lost revenue from the temporary payroll tax cut of 2010. It is projected to remain in surplus until 2025 when it is first projected to start selling off bonds held by the trust fund.

http://www.cepr.net/index.php/data-bytes/social-security-bytes/jump-in-life-expectancy-assumptions-drives-latest-social-security-projections

figures lie & liars figure.

[CountAllVotes]

1. Tell that to my dead cousins

I had four cousins. They are all dead now. They died between the ages of 45-53 years of age; 2 of cancer and the other two strokes.

Boomers aren't living that long. I see many of the Greatest Generation folks still living with deceased children however!

What a crock o'lies!

:grr:

:kick: & recommend

[RaleighNCDUer]

4. I believe you're rignt - the boomers aren't going to be as long-lived as

their parents' generation.

The obesity epidemic, the sharp jump in Alzheimers, stresses from global climate change, new forms of environmental pollution, like fracking, the continually collapsing economy...any number of new factors are going to result in shorter lifespans.

Maybe the decline in smoking will counter-balance it some, but OTOH, the much of the decline in smokers is counted as 'former smokers' not 'never smoked' - and the boomers smoked a lot.

I see little reason to be optimistic.

[indepat]

6. Almost all quality of life factors, including longevity, will likely erode significantly

from our present status at/near the bottom for all industrialized nations, thanks to the pubs' perverted ideology being incessantly ramrodded through the Congress and signed into law, to wit: longevity will likely decline, rather than increase, since pubs are determined to gut social security, Medicare, and Medicaid al the while health-care costs spiral upward. :patriot:

[jberryhill]

5. Several related people had shorter than average lifespans?

Well, that is some hardcore statistical proof right there, I suppose.

[CountAllVotes]

8. these were 2nd cousins

I don't know how genetic it is but I lost my own brother (who never smoked nor drank even once in his life time) of cancer at the age of 45.

Said cousins had grand parents that lived to be well into their 80s and 90s.

Genetic? I think the other things mentioned are more likely the culprits that were the cause of such early death. :(

:dem:

[Hannah Bell]

9. that may not be, but there is some evidence that poorer americans' lifespans are decreasing.

if things keep going as they are, i expect that trickle to become a flood.

also evidence that americans' heights are decreasing

[dkf]

2. Are they ahead of or behind the actuarial tables private insurance is calculating?

The insurance industry revises their tables every 20 years or so. It makes sense that SS do so also.

[blindpig]

3. k&r

[msongs]

7. our bloated welfare military budget could be slashed by 50% fo "fix" SS nt