Assume Longer Life Expectancies, SSA Report Says
December 7, 1999
A study prepared for the Social Security Advisory Board notes that Americans will be living longer in the next century and advises the system to take that into account in its calculations. It also suggests cutting expectations about the financial performance of investments.
- Technical experts who prepared the report recommended that current life-expectancy assumptions be boosted so as to be 3.7 years longer by the year 2070.
- That probably wouldn't change the system's projected insolvency date of 2034 by more than a year -- but would have a big impact on the trust fund's finances later in the next century.
- The advisory panel recommends an increase of only about 0.15 percentage points over the Social Security Administration's projection of real growth in gross domestic product of 2 percent for 2000.
- In determining how much money the trust fund collects, the panel recommends a long-term wage-growth assumption of 1.1 percent -- compared to the current 0.9 percent assumption.
Overall, the report suggests the current system is in weaker shape than previously recognized.
Source: John D. McKinnon, "Study Finds New Weaknesses in Social Security," Wall Street Journal, December 7, 1999.
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