Increasing Life Expectancy

“When Franklin Roosevelt signed Social Security into law, average life expectancy was 64 and the earliest retirement age in Social Security was 65. Today, Americans on average live 14 years longer, retire three years earlier, and spend 20 years in retirement.”
~Simpson Bowles
Increasing Life Expectancy's Higher Cost

Increasing life expectancies does in fact create two financial burdens for Social Security. First, it can mean that people are living longer in retirement so that they will collect benefits for a longer period of time. Second, it also can mean that people become more likely to reach the age where they can collect benefits at all.

Dubious At Best

Even with all of the increases in life expectancy that have occurred, research from the Urban Institute, says that on average people born in 1960 and later expect to collect less in benefits than they contributed.  The only thing that increased life expectancies have done through 2010, is reduce the loss expected by average workers today.

Flaw Logic

The worst part of the logic is that people who live longer only collect more in benefits.  It fails to recognize that they pay more in contributions.  The most significant component of increasing life expenctancy is decreasing infant mortality.  Given that average infants born in 1960 and later, expect to contribute more to the system than they collect, at least some part of increasing life expectancy is making Social Security more solvent rather than less.

Politicians who push this idea are basing it on life expectancy at birth.  Life expectancy at birth has nothing to do with a pension system.  No private insurance company uses this data because it is not meaningful.  It is difficult to believe that people who quote this data are not trying to deliberately misled the public.

What Is Missing?

Someone should demostrate that today life expectancy is growing faster than was planned by Social Security.