Tag: longevity

Who Gets to Live to 100 and Who Doesn’t? Reviewing the 2020 Living to 100 Symposium Monograph

Mary Pat Campbell

Link: https://www.soa.org/sections/reinsurance/reinsurance-newsletter/2021/march/rsn-2021-03-kaufhold/

Excerpt:

Given these advances in understanding the theoretical methods of evaluating multiple, related mortality data sets, it is particularly promising that the Human Mortality Database, with the SOA’s sponsorship, has recently made available mortality data for the United States at the level of the individual county. Moreover, Professor Magali Barbieri of University of California, Berkeley in January 2021 published an SOA Research Report[3] on “Mortality by Socio-economic Category in the United States” using this data series. Professor Barbieri is one of the directors of the HMD project, which is jointly run by UC Berkeley and the Max Planck Institute for Demographic Research in Rostock, Germany and support from the Center on the Economics and Development of Aging (CEDA) and the French Institute for Demographic Studies (INED). In her paper, Barbieri studies socio-economic differences linked to mortality differentials by county, based on information available at the county level regarding education, occupation, employment, income, and housing. The gap between the highest and lowest county decile is huge and growing. In 2018, the qx-rate for 45-year-old men in counties with the lowest Socioeconomic Index Score (SIS) was 2.5 times that for men of that age in counties with the highest SIS. This gap is even greater than the difference between smokers and non-smokers. Professor Barbieri’s report shows the widening trend between the different socio-economic strata which she captures by grouping the counties into deciles by SIS. While the highest SIS score is associated with a life expectancy that matches or even beats the OECD average, people living in counties with the lowest SIS have hardly seen any improvement in their life expectancy over the last four decades. Comparing the average life expectancy at birth within the highest decile of counties to the lowest, there was a gap of 3.0 years in 1982, the first year for which consistent data was available. This gap has more than doubled since then, rolling in at 6.6 years difference in life expectancy in 2018. That is an increase of 120 percent. Worse still, the gender gap once again manifests itself in the mortality trends, with females showing an increase of the socio-economic mortality gap of 260 percent over the 36-year period, compared to 76 percent for males.

Author(s): Kai Kaufhold

Publication Date: March 2021

Publication Site: Reinsurance News at the Society of Actuaries

The trillion dollar upside to longevity

Mary Pat Campbell
The trillion dollar upside to longevity

Graphic:

Excerpt:

This model allowed the researchers to place a monetary value on the financial gain from longer life, better health and changes in the rate at which we age [4,5]. VSL represents the sum of the value of each remaining year of life, discounted to the present day and weighted by the survival rate.

The study revealed that a compression of morbidity that improves health is more valuable than further increases in life expectancy. However, in order to raise economic gains, longevity has to improve too. Slowing down aging reduces the rate at which biological damage occurs and improves both health and mortality.

Publication Date: 16 February 2021

Publication Site: Longevity Technology

All’s Well That Ages Well: The Economic Value of Targeting Aging

Mary Pat Campbell

Link: https://longevitydividend.london.edu/wp-content/uploads/2021/01/allswell_080121.pdf

Graphic:

Excerpt:

Human lifespans are increasing with advances in medicine, but the economic value of these gains are poorly understood. Based on U.S. data, we show a compression of morbidity that improves health
is more valuable than further increases in life expectancy. However, economic gains to better health diminish unless longevity also improves. Treatments that target aging are hence particularly valuable,
as they produce both healthier and longer lives. We calculate a slowdown in aging that increases life expectancy by one year is worth $38 trillion, and for ten years $367 trillion. Evaluating the impact
of metformin shows targeting aging offers potentially larger economic gains than eradicating individual diseases. Complementarities between health, longevity and age lead to a virtuous circle that means
improvements in aging increase the value of further gains. Aligned with trends in demographics and disease, this implies the gains from age targeting treatments will increase further in the decades ahead.

Author(s): Martin Ellison, Andrew J. Scott, David A. Sinclair

Publication Date: 8 January 2021

Publication Site: London Business School

Economic Research on Treating Aging to Extend Healthy Longevity

Mary Pat Campbell

Link: https://www.fightaging.org/archives/2021/02/economic-research-on-treating-aging-to-extend-healthy-longevity/

Excerpt:

In one sense, there is an enormous wealth of research on the economics of longer lives. This is a byproduct of the operations of sizable pensions and life insurance industries, dependent as they are on successfully predicting future trends in life span. On the other hand, outside this somewhat narrow scope, most concerned with the gain of a tenth of a year here and the loss of a tenth of a year there, there is comparatively little economic work that is directly tied to the research and advocacy communities engaged in trying to treat aging and greatly lengthen healthy human lifespan. That will change as the longevity industry both grows and succeeds in introducing age-slowing and rejuvenating therapies into the clinic.

The paper and commentary that I point out today might be taken as a sample of what lies ahead for the economics profession. At least some economists are at present managing to convince grant-awarding bodies in their field that, yes, there is real movement towards the treatment of aging, and perhaps someone should look into how that will likely play out in markets and societies. It should come as no great surprise to the audience here that even modest gains in slowing or reversing aging have vast economic benefits when they occur across an entire population. The cost of coping with aging is vast, the cost of incapacity and lost knowledge and death due to aging equally vast. It is by far the biggest and most pressing issue that faces humanity, and now we enter an era in which we can finally start to do something about it.

Publication Date: 24 February 2021

Publication Site: Fight Aging

Mapping the World’s Youngest and Oldest Countries

Mary Pat Campbell
Mapping the World’s Youngest and Oldest Countries

Graphic:

Excerpt:

Throughout history, it was typical to see both birth and death rates at higher levels. But today, in most parts of the world, women are having fewer children, and innovations in healthcare and technology mean we are all living longer. The average person today lives to 72.6 years old, while the rate of births per woman has fallen to 2.5.

These trends have drastically altered the demographics of mature economies, resulting in a much older population. In many developing countries, however, births still outweigh deaths, resulting in populations that skew younger.

This visualization uses data from the World Bank to examine the countries with the highest shares of old and young people.

Author(s): Avery Koop

Publication Date: 12 February 2021

Publication Site: Visual Capitalist

THE CONSEQUENCES OF CURRENT BENEFIT ADJUSTMENTS FOR EARLY AND DELAYED CLAIMING

Mary Pat Campbell

Link: https://crr.bc.edu/wp-content/uploads/2021/01/wp_2021-3_.pdf

Abstract
Workers have the option of claiming Social Security retirement benefits at any age between 62 and 70, with later claiming resulting in higher monthly benefits. These higher monthly benefits reflect an actuarial adjustment designed to keep lifetime benefits equal, for an individual with average life expectancy, regardless of when benefits are claimed. The actuarial
adjustments, however, are decades old. Since then, interest rates have declined; life expectancy has increased; and longevity improvements have been much greater for high earners than low earners. This paper explores how changes in longevity and interest rates have affected the
fairness of the actuarial adjustment over time and how the disparity in life expectancy affects the equity across the income distribution. It also looks at the impact of these developments on the costs of the program and the progressivity of benefits.


The paper found that:
• The increases in life expectancy and the decline in interest rates argue for smaller reductions for early claiming and a smaller delayed retirement credit for later claiming.
• Specifically, the benefit at 62 should equal 77.5 percent, as opposed to 70.0 percent, of the full age-67 benefit, and the benefit at 70 should equal 119.9 percent, instead of 124.0 percent, of the full benefit.
• The outdated actuarial adjustments are a modest moneymaker for the program – about $1.9 billion in 2018, with most of the gains coming from those claiming at 62, who are typically lower earners. Surprisingly, the correlations between earnings and life expectancy and between earnings and claiming behavior have only modest implications for both the cost and progressivity of Social Security benefits.
• Finally, the cost and distributional effects of earnings-related life expectancy and claiming cannot be addressed through the actuarial adjustments for early and late claiming. They reflect the fact that high earners get their large benefits for a long time and low earners get their more modest benefits for a shorter time.

Authors: Andrew G. Biggs, Anqi Chen, and Alicia H. Munnell

Publication Date: January 2021

Publication Site: Center for Retirement Research at Boston College

Social Security COLA: What’s Working, What’s Not

Mary Pat Campbell

Link: https://www.thinkadvisor.com/2021/01/12/social-security-cola-whats-working-whats-not/

Excerpt:

The only remaining provider of inflation-protected annuities in the United States is the federal government through Social Security. Retirees today can buy more of this income by waiting until age 70 to claim Social Security, thereby boosting their inflation-protected income by 30% over their full retirement age.


For healthy, higher-income retirees who have seen the largest improvements in longevity in recent decades, this increase in lifetime inflation-protected income appears to be a bargain.

Authors: Jason Fichtner and Michael Finke

Publication Date: 12 January 2021

Publication Site: Think Advisor

The Consequences of Current Benefit Adjustments for Early and Delayed Claiming

Mary Pat Campbell
The Consequences of Current Benefit Adjustments for Early and Delayed Claiming

Abstract:

Workers have the option of claiming Social Security retirement benefits at any age between 62 and 70, with later claiming resulting in higher monthly benefits.  These higher monthly benefits reflect an actuarial adjustment designed to keep lifetime benefits equal, for an individual with average life expectancy, regardless of when benefits are claimed.  The actuarial adjustments, however, are decades old.  Since then, interest rates have declined; life expectancy has increased; and longevity improvements have been much greater for high earners than low earners.  This paper explores how changes in longevity and interest rates have affected the fairness of the actuarial adjustment over time and how the disparity in life expectancy affects the equity across the income distribution.  It also looks at the impact of these developments on the costs of the program and the progressivity of benefits.

The paper found that:

The increases in life expectancy and the decline in interest rates argue for smaller reductions for early claiming and a smaller delayed retirement credit for later claiming.

Specifically, the benefit at 62 should equal 77.5 percent, as opposed to 70.0 percent, of the full age-67 benefit, and the benefit at 70 should equal 119.9 percent, instead of 124.0 percent, of the full benefit.

The outdated actuarial adjustments are a modest moneymaker for the program – about $1.9 billion in 2018, with most of the gains coming from those claiming at 62, who are typically lower earners. Surprisingly, the correlations between earnings and life expectancy and between earnings and claiming behavior have only modest implications for both the cost and progressivity of Social Security benefits.

Finally, the cost and distributional effects of earnings-related life expectancy and claiming cannot be addressed through the actuarial adjustments for early and late claiming. They reflect the fact that high earners get their large benefits for a long time and low earners get their more modest benefits for a shorter time.

The policy implications of the findings are:

Increases in life expectancy and the decline in interest rates suggest smaller reductions for early claiming and a smaller delayed retirement credit for later claiming.

Accounting for differential mortality would involve changing benefits, and is not a problem that can be solved by tinkering with the actuarial adjustments.

PDF link to full paper: https://crr.bc.edu/wp-content/uploads/2021/01/wp_2021-3_.pdf

Authors: Andrew G. Biggs, Anqi Chen, Alicia H. Munnell

Publication Date: January 2021

Publication Site: Center for Retirement Research at Boston College