Monday, July 12, 2010

Zombie Social Security lies: Retirement age must be raised because people are living longer

Earlier this week, Ezra Klein voiced a strong argument against raising the age for receiving Social Security benefits to 70:

I'm not surprised to hear there's energy behind pushing the retirement age at which you get full Social Security benefits back to 70. It's been in the discussion for a long time, people have grown comfortable talking about the idea, and perhaps most importantly, it seems like a no-brainer to pundits and politicians who would happily pay you to keep working to age 70, and in fact beyond.

But I've never liked it. The customary justification is that when Social Security was created, people died younger, and so it was never meant to stretch this far in the first place. But that argument works in the other direction, too: Our country has become far richer than the architects of Social Security could have possibly imagined. It would make perfect sense for us to give ourselves more leisure time, if we chose to take it, at the end of our lives.

This is a strong and civilized argument that carries a lot of weight, and one with which I think most progressives can heartily agree. However, there is a stronger argument, not based on an appealing philosophy but on solid statistics, that is getting very, very short shrift in this debate, and it's laid out best by Nancy Altman in her excellent (and highly recommended) history of Social Security, The Battle for Social Security: From FDR's Vision To Bush's Gamble:

Related to issues about retirement age are questions about life expectancy. Many people are under the mistaken impression that Americans receive retirement benefits for considerably longer than they did when the program was created. The misconception results from looking at life expectancies from birth, which have changed dramatically because of the medical success achieved in conquering childhood diseases. But those numbers reflect changes in the numbers of those who survive to retirement, not what happens thereafter. The statistics regarding children distort the overall average ....

For Social Security purposes, the correct question is not how many live to age 65, but rather how long those reaching age 65 live thereafter. Here the numbers are not as dramatic. In 1940, men who survived to age 65 had a remaining life expectancy of 12.7 years. Today, a 65 year old man can expect to live not quite three years longer than he might have in 1940, or 15.3 years beyond reaching age 65. For women, the comparable numbers are 14.7 years beyond age 65 in 1940; 19.6 years in 1990. [Emphasis added.]

Clearly, despite the common misconception that we're all living a dozen or so years longer than the 65-year-old retiree did 70 years ago, it's just not true.

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