The long term threats to the sustainability of Social Security are well known. Higher average life expectancies combined with declining demographics mean that the program’s funds will run out in 2033, according to current government estimates. Writing in the NYT, Gary King and Samir Sonjei warn, however, that the 2033 estimate is based on data that underestimates American life expectancy. The program may in fact run out two years earlier than predicted:
We reached these conclusions, and presented them in an article in the journal Demography, after finding that the government’s methods for forecasting Americans’ longevity were outdated and omitted crucial health and demographic factors. Historic declines in smoking and improvements in the prevention and treatment of cardiovascular disease are adding years of life that the government hasn’t accounted for. (While obesity has rapidly increased, it is not likely, at this point, to offset these public health and medical successes.) More retirees will receive benefits for longer than predicted, supported by the payroll taxes of relatively fewer working adults than projected.
On the one hand, it’s good news that we’re going to live longer than expected. We’re still reaping the benefits of the campaign against smoking, the most successful public health advocacy campaign in recent memory.On the other hand, this revised data makes our demographic transition policy deficit all the more pressing. As our medical technology gets ever more sophisticated, we will probably see our life expectancy increase at accelerating rates. In five or ten years, these Social Security figures might have to be revised downward again.The news isn’t all bad. Better medical IT will help reduce medical costs even as it raises life expectancy, hopefully easing the side effect of longevity on the Social Security budget. But waiting around for a medical IT silver bullet isn’t a prudent option either. The bigger the pension monster gets, the tougher it is to slay, silver bullet or no.