American poor people are dying sooner and the rich are living longer 13 years more, on average. That could be really bad news for the health of Social Security.
A rich man will live about 13 years longer and draw about $132,000 more in federal retirement benefits than his poor counterpart, according to a report released on Thursday by the U.S. National Academy of Sciences.
The report, The Growing Gap in Life Expectancy by Income, also criticized political proposals to raise the eligibility age for Social Security from 62 to 64, and for Medicare from 65 to 67. These plans would just take more money away from poor retirees, the expert panel concluded, without helping the retirement programs stave off bankruptcy.
Over the past eight decades, the life expectancy gap across different income groups has become so much bigger, said Citigroups Peter Orszag, co-chair of the committee, in a statement.
Men born in 1960 who are in the top fifth of incomes can expect to live to 89 today, whereas low earners, on average, will only make it to 76. Thats actually one year sooner than the average year of death, 77, for low-earning men born in 1930, at the beginning of the Great Depression.
High-earning women who are now 50 will similarly live longer and accrue about $28,000 more in benefits than poor women, the report found. Rich women will live more than 13 years longer, on average, than poor women. And poor women are actually losing ground: Those born in 1930 will live about four years more than those born in 1960.
The study is making the excellent point that when high-income (and especially high-education) household life expectancy is rising relative to life expectancy for low-income households, the impact is to redistribute more towards higher income folks, economist Jonathan Skinner of Dartmouth told BuzzFeed News by email.
Because Social Security, Medicare, Medicaid and related programs are increasingly large parts of the federal budget nearly half of its $3.5 trillion sum last year and the Congressional Budget Office has projected Social Security to remain solvent until 2029, a number of proposals have been made by politicians to cut benefits or raise paycheck taxes to cover future shortfalls.
For example, at last nights Republican presidential debate, frontrunner Donald Trump proposed allowing the wealthy to voluntarily forego the benefits, and said he would do so.
The report concludes that raising the age at which a person can collect the bulk of their Social Security benefits from 67 to 70 would result in significant savings to the program, reducing the benefits the poor receive by 25% and the well-off by 20%.
While the longevity analysis of the report looks sound, the report authors erred by only looking at cuts to federal retirement programs, and not expanding them, Alicia Munnell of the Center for Retirement Research at Boston College told BuzzFeed News by email.
Some of us believe that given the inadequacy of other parts of the retirement income system maintaining current benefits levels is crucial, she said. It is not even-handed to explore implications with examples of only benefit cuts.
See full story on buzzfeed.com
