I wrote last week about rising life expectancy: Children born today will most likely live on average to their late 80s, well above the current average life expectancy of 79. You probably think of this as good news, and from most perspectives, it is.
But every rose has its thorn, and longer lives happen to create some problems for Social Security. As people live longer, they spend a larger fraction of their lives in retirement, collecting benefits.
As large government programs go, Social Security retirement benefits are extremely simple: The program takes money from working people and gives it to retired people. This simplicity is great in that it makes it easy to see the magnitude of the program’s solvency problem: large, but manageable through modest adjustments that can take place over decades. Simplicity is a disadvantage because it means the problem can’t be addressed through innovation; the military or the Justice Department might find ways to do more with less, but sending out a $1,000 benefit check will always cost at least $1,000. NY Times