If we look at life expectancy statistics from
the 1930s we might come to the conclusion that the Social
Security program was designed in such a way that people
would work for many years paying in taxes, but would not
live long enough to collect benefits. Life expectancy at
birth in 1930 was indeed only 58 for men and 62 for
women, and the retirement age was 65. But life expectancy
at birth in the early decades of the 20th century was low
due mainly to high infant mortality, and someone who died
as a child would never have worked and paid into Social
Security. A more appropriate measure is probably life
expectancy after attainment of adulthood.
As Table 1 shows, the majority of Americans
who made it to adulthood could expect to live to 65, and
those who did live to 65 could look forward to collecting
benefits for many years into the future. So we can observe
that for men, for example, almost 54% of the them could
expect to live to age 65 if they survived to age 21, and
men who attained age 65 could expect to collect Social Security
benefits for almost 13 years (and the numbers are even higher
for women).
Also, it should be noted that there were already
7.8 million Americans age 65 or older in 1935 (cf. Table
2), so there was a large and growing population of people
who could receive Social Security. Indeed, the actuarial
estimates used by the Committee on Economic Security (CES)
in designing the Social Security program projected that
there would be 8.3 million Americans age 65 or older by
1940 (when monthly benefits started). So Social Security
was not designed in such a way that few people would collect
the benefits.
As Table 1 indicates, the average life
expectancy at age 65 (i.e., the number of years a person
could be expected to receive unreduced Social Security retirement
benefits) has increased a modest 5 years (on average) since
1940. So, for example, men attaining 65 in 1990 can expect
to live for 15.3 years compared to 12.7 years for men attaining
65 back in 1940.
(Increases in life expectancy are a factor
in the long-range financing of Social Security; but other
factors, such as the sheer size of the "baby boom"
generation, and the relative proportion of workers to beneficiaries,
are larger determinants of Social Security's future financial
condition.)
Table
1: Life Expectancy for Social Security |
Year
Cohort Turned 65 |
Percentage
of Population Surviving from Age 21 to Age 65 |
Average
Remaining Life Expectancy for Those Surviving to Age
65 |
|
Male
|
Female
|
Male
|
Female
|
1940
1950
1960
1970
1980
1990 |
53.9
56.2
60.1
63.7
67.8
72.3 |
60.6
65.5
71.3
76.9
80.9
83.6 |
12.7
13.1
13.2
13.8
14.6
15.3 |
14.7
16.2
17.4
18.6
19.1
19.6 |
Table
2: Americans Age 65
or Older 1880-1990 |
Year
|
Number
of Americans Age 65 or Older |
1880
1890
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000 |
1.7
million
2.4 million
3.0 million
3.9 million
4.9 million
6.7 million
9.0 million
12.7 million
17.2 million
20.9 million
26.1 million
31.9 million
34.9 million |
|