As Life Expectancy Gap Widens, The Well-To-Do Collect More Benefits

In an op-ed for the Washington Post, Robert Samuelson called attention to a new report by the National Academies of Sciences, Engineering, and Medicine which found a notable increase in the life expectancy gap. In his piece, Samuelson points out the disparity means more federal spending going towards wealthy retirees who may not need help. He explains:

We all know that the United States is aging, but probably few of us know how skewed the process is in favor of the middle and upper-middle classes. Among men, life expectancy has improved substantially for the richest 60 percent. But for the poorest 40 percent, gains are tiny or nonexistent. Changes for women reflect similar trends, though less sharp.

While the richest twenty percent of men are living longer than ever, the poorest twenty percent have actually experienced a slight decrease in life expectancy. Men in the richest quintile of the population born in 1960 lived, on average, 7.1 years longer than those born in 1930, while, men in the poorest quintile, have lived a half a year less, from 76.6 years in 1930 to 76.1 years in 1960. This gap only exacerbates the income bias of many federal spending programs. He highlights:

The study estimated the present value of four federal programs for typical recipients (Social Security, Medicare, Medicaid and Supplemental Security Income). For the top fifth in income for men, lifetime benefits totaled $522,000, a third more than the $391,000 for the poorest fifth.

Although programs such as Social Security are designed with the poor in mind, they often tend to favor middle and upper-class families. Samuelson argues that under the current system, the life expectancy gap allows richer retirees to collect benefits for a longer period of time, meaning that they receive a larger amount of lifetime benefits as compared with lower income retirees. He states:

We are spending the most money for the longest periods to protect people who need the least protection, because they have more private savings and pension benefits than do the poor.

Samuelson notes that to alleviate some of the pressure on the system caused by changes in life expectancy, benefits to high earners should be curbed. Changing the formula for minimum benefits and increasing the retirement age would also help slow the growth of benefits. You can use our Social Security Reformer to experiment with reductions in spending or tax increases in order to address the need for Social Security reforms.