For more than a century life expectancy in the United States has been steadily increasing. The last time there was a major change in this trend was around the time of the 1918 Spanish flu outbreak. This flu pandemic, which was caused by an H1N1 influenza A virus, lasted from February 1918 to April 1920. There were four successive waves of the pandemic, and approximately 675,000 people in the United States died over this time.
As you can see from the graph below it caused a significant drop in US life expectancy, which subsequently rebounded and continued its upward trend for most of the next 90 years.
We expect a similar, but smaller, decline to happen as a result of the COVID-19 coronavirus outbreak. As of mid-March, there have been nearly 30,000,000 cases in the United States with approximately 540,000 deaths. Future charts and studies will show us more precisely what the impact was on US life expectancy.
We know that there have been great advances in medicine, access to clean water, infant mortality rates and most other measures of quality of life over the last century. However, according to the National Vital Statistics Reports, US life expectancy has been stagnant four the last 12 years. From 2008 to 2020, life expectancy remained at just over 77 years. This is somewhat disturbing and disheartening, as many people believe that the stagnation in life expectancy is primarily driven by lifestyle choices.
As we have talked about previously, advances in genomics studies, stem cell treatments and biomedical engineering will likely continue to drive not only life expectancy, but quality of life in the future. After all, who wants to live longer if the additional years are not healthy and productive. We have also been told that if you live to see the year 2030, you may very well benefit from many of these quickly developing treatments and protocols.
From a financial perspective, we need to pay attention to these life expectancy trends, as they will drive policies such as the recent increase in age for IRA required minimum distribution tables. This was the first such increase in nearly 40 years. We also know that there is a potential for the start date, as well as the age for full Social Security benefits to be pushed back. The main justification for these policy decisions would be a continuation of increasing life expectancy in the US.
We all want to live healthy and productive lives. The future advances in health and medical sciences shows great promise in helping us reach this goal. We will continue to pay attention to what this means for the economic and financial policies that may impact you, our friends and clients, during your retirement years. It is important to understand these issues as we continue “Moving Life Forward”.
© 2021 Jesse Hurst