Is U.S. Life Expectancy Really Declining?

If so, what does it mean for retirement planning and saving

401k, life span, retirement, mortalityIs it ticking faster?

Recent headlines over declining life expectancies observed in the U.S. provoked widespread alarm over causes and potential impact. Maybe people won’t outlive assets after all, some opined, treating it as yet another indictment of the country’s retirement and health care systems.

However, the Society of Actuaries found that mortality rates actually decreased in 2016, in apparent contradiction of the Center for Disease Control report which first triggered concern.

So, what’s happening? The answer, not surprisingly, is more nuanced, and therefore not as sensational as media reports initially suggested.

“The overall age-adjusted mortality rate (both genders) from all causes of death decreased 0.6 percent in 2016,” the SOA explained. “This decrease in overall mortality may seem to run counter to the CDC’s report that life expectancy at birth declined 0.1 years in 2016. Generally, a decrease in the mortality rate would be expected to produce an increase in life expectancy. However, both figures are correct.”

Calling 2016, “a somewhat anomalous year” the society helpfully noted that in most years, “when age-adjusted mortality rates decrease, life expectancy at birth would increase.”

Conversely, when age-adjusted mortality rates increase, life expectancy at birth would decline, it added, which is what occurred in 2015, when age-adjusted mortality increased by 1.2 percent, and life expectancy at birth declined by 0.1 years.

However, the anomaly that occurred in 2016 is explained “by the differing impacts on life expectancy of mortality rate changes of different ages. In 2016, increased mortality rates in the younger and middle ages (mostly due to accidents) reduced life expectancy at birth more than it was extended by mortality improvement at older ages.”

Yet the overall age-adjusted mortality rate for the entire U.S. population did decline by 0.6 percent.

“The overall decrease of mortality in 2016 reversed the experience of 2015. Mortality improvement in older age groups offset large mortality increases, mostly due to external causes, in middle age groups. All age groups, except ages 25-34, had lower mortality in 2016 than 1999.”

A potentially concerning trend was identified, however, as the rate of “overall mortality improvement has slowed in the most recent five years.”

“A very large contributor to the recent slowdown in population mortality improvement since the late 2000’s has been deaths due to heart disease,” the SOA concluded.

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