Social Security Underestimates Future Life Spans, Critics Say

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By ROBERT PEAR
Published: December 31, 2004

WASHINGTON, Dec. 30 - When the federal government assesses the long-term financial problems of Social Security, it assumes that increases in life expectancy will be slow and measured. But many population experts say they believe that Americans' life expectancy will increase rapidly in the 21st century, making the program's financial problems even worse.

President Bush and Congress are preparing for a debate over the future of Social Security, whose solvency depends not only on factors including productivity, inflation and birth rates but also on how long beneficiaries will be living.

Life expectancy at birth increased by 30 years in the last century, and many independent demographers, citing the promise of biomedical research and the experience of some other industrialized countries, predict significant increases in this century. The Social Security Administration foresees a much slower rise.

"Life expectancy will make a very big difference in the fiscal viability of Social Security, but the agency's projections of longevity appear too conservative," said Prof. Samuel H. Preston of the University of Pennsylvania, one of the nation's leading demographers.

Dr. Preston said the agency assumed that "past advances in life expectancy are unrepeatable, even though the medical research establishment is routinely producing important breakthroughs that reduce the incidence or fatality of a variety of diseases."

Richard M. Suzman, associate director of the National Institute on Aging, a unit of the National Institutes of Health, said: "There is a long history of government actuaries and statisticians underestimating future gains in life expectancy. The United States is unfortunately well below the outer limits of life expectancy. Other countries are doing much better. That gives us an indication of the potential room for improvement."

Tables published by the government's National Center for Health Statistics show that life expectancy at birth was 47.3 years in 1900, rose to 68.2 by 1950 and reached 77.3 in 2002. The latest annual report of the Social Security trustees projects that life expectancy will increase just six years in the next seven decades, to 83 in 2075. A separate set of projections, by the Census Bureau, shows more rapid growth.

Social Security says male life expectancy at birth will be 81.2 years in 2075. The Census Bureau, using different methods and assumptions, says that level will be reached much earlier, in 2050.

Likewise, Social Security says female life expectancy will reach 85 years by 2075, while the Census Bureau says it will exceed 86 in 2050.

For the American population as a whole in the last century, most of the gains in life expectancy at birth occurred from 1900 to 1950. But most of the gains in life expectancy among people who had already reached age 65 were seen after 1950.

Last year an expert panel advising the Social Security Administration found "an unprecedented reduction in certain forms of old-age mortality, especially cardiovascular disease, beginning in the late 1960's."

The panel said Social Security was wrong to assume a slower decline in mortality rates among the elderly in the next 75 years. Rather, it said, the government should assume that mortality will continue to decline as it did from 1950 to 2000.

Ronald D. Lee, a professor of demography and economics at the University of California, Berkeley, said: "I foresee death rates of the elderly in the United States continuing to decline at the same pace they have declined since 1950. In fact, there is evidence that the pace of decline in other developed countries has accelerated in recent decades."

The Social Security Administration defends its assumptions.

"There is a wide range of opinion among experts on this issue," said Mark Hinkle, a spokesman for the agency. "In the last few years, we've moved a bit closer to the position of other agencies and demographers."

Some experts say other factors could ease the effects of longer life on Social Security's solvency.