ACTUARIAL NOTE SOCIAL SECURITY ADMINISTRATION

Number 158

June 2016

Office of the Chief Actuary

Baltimore, Maryland

HUMAN LONGEVITY AND IMPLICATIONS FOR SOCIAL SECURITY 

ACTUARIAL STATUS

by Stephen Goss, Karen Glenn, Michael Morris, K. Mark Bye, and Felicitie Bell

Introduction

Changes in long-term Social Security actuarial status are influenced principally by 

demographic changes. While both the revenue and cost of the program are affected similarly 

by changes in economic factors such as average earnings growth and price inflation, albeit 

with different lags, this is not the case for changes in demographic factors. Demographic 

changes affect the age distribution of the adult population, which is a critical determinant of

actuarial status. The age distribution of the population determines the size relationship 

between the working age population and the “aged” population, the latter of which accounts 

for the large majority of Social Security beneficiaries and cost. There is no automatic 

mechanism in the program structure to compensate for changes in the age distribution of the 

population.

Among the principal demographic factors (mortality, fertility, and immigration), changes in 

fertility experience (the birth rate) will have the greatest effect on the age distribution of the 

adult population for the future, and thus the cost of the program. The graph below shows that 

the sustained drop in the total fertility rate (TFR) after the baby-boom period is responsible 

for a large and seemingly permanent level shift in the ratio of the population over age 65 to 

the population at ages 20 through 64, the principal working ages. Mortality improvement is 

also important, as it also affects the age distribution of the population, but at a gradual and

steady pace. The gradual, steady change in the aged dependency ratio due to mortality 

improvement can be better seen in the graph below, by focusing on the lines where TFRs are 

assumed to have remained high after the baby boom period.

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Aged Dependency Ratio 2015 TR

Population 65+/(20-64)

Actual and TR Intermediate

TFR remains at 3.0 after 1964

TFR remains at 3.3 after 1964
2

This note is focused on considerations in projecting human longevity and the implications of 

these projections for the age distribution of the population and thus for Social Security cost, 

income, and actuarial status. The fundamental aspects of future mortality that affect age 

distribution are (1) the rate of decline (improvement) in death rates by age and gender, and 

(2) the degree to which mortality improvement will accelerate or decelerate in the future. 

Different trends in mortality improvement by income and earnings level are also important 

for the cost and income of the Social Security program. Making assumptions about future 

mortality improvement requires careful consideration of the conditions that have contributed 

to past improvement, and reasoned judgment about the conditions that are likely to determine 

the rate of improvement in the future.

In this note, we show that the rate of mortality improvement has varied greatly by age, and 

such age variation seems likely to continue in the future. Use of different “age gradients” for 

future mortality decline has strong implications for the age distribution of the population. We 

present our analysis of recent mortality projections made by Ronald Lee (University of 

California, Berkeley) that incorporate historical mortality rates for ages 65 and over based on 

Medicare enrollment data, and the implications of his projections for the actuarial status of 

the Social Security trust funds. We note that the Social Security Advisory Board’s 2015

Technical Panel on Assumptions and Methods concurred with the use of a mortality age 

gradient, as well as with the use of cause-specific rates of decline, the latter of which results

in a degree of deceleration for mortality improvement in the future.

Life Expectancy

Life expectancy at birth has been a popular way to characterize changes in mortality. 

However, focusing solely on life expectancy at birth can be misleading. The greatest 

increases in this measure have been obtained by reducing infant and childhood mortality. For 

example, reducing the death rate during infancy by 1 percentage point can increase life 

expectancy at birth by about 1 percent. But with infant mortality now so low, future increases

in life expectancy will have to come from reductions in death rates at older ages, where fewer 

people are still alive, and where fewer additional years of life result for any reduction in

death rates. Thus, unless unprecedented reductions in death rates at older ages can be 

sustained, increases in life expectancy at birth will slow.

An illustration of “best-practice” life expectancy at birth across nations over the last 160 

years developed by Jim Oeppen and James Vaupel in 20021 suggested that this measure had 

been increasing at a linear rate. Oeppen and Vaupel conjectured that this linearity would 

continue into the future. Many have been skeptical about this assertion, as it would require 

substantial acceleration of mortality reduction at older ages compared to historical trends. In 

2003, Lee published a paper2 in which he called into question the nature of the underlying 

historical trend. He looked at the average annual rates of decline for various subperiods, and 

concluded that the shape of the decline in life expectancy better resembles an S shape. More 

 1 Oeppen, Jim and James W. Vaupel. 2002. Broken Limits to Life Expectancy. Science 296:1029-31. 

Available at http://www.econ.ku.dk/okocg/VV/VV-Economic%20Growth/articles/artikler-2006/Brokenlimits-to-life-expectancy.pdf. 2 Lee, Ronald D. 2003. Mortality Forecasts and Linear Life Expectancy Trends. Center for the Economics 

and Demography of Aging, 2003. Available at http://escholarship.org/uc/item/3sd9m7d5.
3

recent work by Jacques Vallin and France Meslé3,4 has also helped clarify the real nature of 

the measure and its likely track for the future. As seen in the graph below of maximum

female life expectancy among developed nations, Vallin and Meslé show that the trend is 

best characterized as an “S” curve that has been decelerating since 1960.

Age Gradient in the Rate of Mortality Improvement

The two charts below illustrate relative rates of historical mortality decline by age group for 

the United States, Canada, and the United Kingdom. These historical rates were developed 

by the government actuaries in each country based on the best available national data, and 

were presented at the Society of Actuaries 2014 Annual Meeting and Exhibit.

5 As shown in 

the charts, the age gradient has been similarly strong among these three countries in the past.

 3 Vallin, J. and F. Meslé. 2009. The Segmented Trend Line of Highest Life Expectancies. Population and 

Development Review 35(1): 159-187. Available at http://onlinelibrary.wiley.com/doi/10.1111/j.1728-

4457.2009.00264.x/pdf. 4 Vallin, J. and F. Meslé. 2016. Highest Life Expectancies: Which Leader after Japan? Presentation to the 

2016 Annual Meeting of the Population Association of America. Extended abstract available at 

https://paa.confex.com/paa/2016/mediafile/ExtendedAbstract/Paper1788/extended-abstract.pdf. 5 Additional information available at https://www.soa.org/Files/Pd/2014/annual-mtg/2014-orlando-annualmtg-26-0op.pdf.
4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

 0-14 15-64 65-84 85+

Long-Term Historical Average Annual Rates of Reduction in Mortality 1929 to 2009

Canada

UK

US

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

 0-14 15-64 65-84 85+

Recent Historical Average Annual Rates of Reduction in Mortality 1982 to 2009

Canada

UK

US

Comparing the two charts also shows that the relative rate of decline in mortality at ages 

under 15 has decelerated somewhat for all three countries, but has remained higher than other 

ages. The age gradient in mortality reduction has flattened in the more recent period, due in 

part to the effects of HIV at younger ages and extraordinary advances in treating 

cardiovascular and respiratory disease at older ages. 

Based on considered judgment, the government actuaries in the U.S. and Canada assume that 

the age gradient will persist in the future, but to different degrees.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

 0-14 15-64 65-84 85+

Ultimate Projected Annual Reduction in Mortality in 2013 Projected for 2030-2080

Canada

UK

US

U.S projections maintain a relatively larger portion of the historical age gradient in mortality 

improvement than do the Canadian projections, while the U.K. Government Actuary assumes 

no future age gradient at all. Some extrapolation approaches retain even more of the age 

gradient than assumed by the U.S. government actuaries. For example, extrapolations using 

the Lee and Carter method, which will be discussed later, presume no change in the historical 

age gradient at all.
5

Mortality Improvement and Health Spending

Any credible analysis of past experience and projection into the future must consider the 

basis for mortality improvement in the past and expected conditions that will determine 

future improvement. The twentieth century experienced a dramatic reduction in mortality in 

developed nations as living conditions improved, adequacy of nutrition and access to medical 

care greatly expanded, and spending on medicine and health research exploded. These factors 

propelled unprecedented declines in death rates at all ages.

The broad economic expansion after World War II, along with the introduction of antibiotics 

and greater health access, led to great mortality improvement through 1954. Another 

dramatic surge in mortality improvement at all ages occurred between 1968 and 1982, with 

the implementation of Medicare and Medicaid expanding primary health care access to the 

elderly, the poor, and the disabled. Through the latter half of the twentieth century, national 

health expenditures expanded dramatically, rising from 4 percent of GDP in 1952 to over 17

percent in 2009. It seems probable that this expansion of health care access and spending is 

related to the reductions in death rates.

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

National Health Expenditures With and Without 

Medicare and Medicaid as a Percent of GDP

NHE/GDP

(NHE-Med&Med)/GDP

NIPA NHE/GDP

In the future, we cannot expect to replicate the impact of Medicare and Medicaid on 

mortality improvement. The Affordable Care Act will expand health care access to the 

uninsured population much more modestly. Since 2009, national health expenditures have 

remained nearly flat as a percent of GDP. In addition, as projected in the 2015 Medicare 

Trustees Report, Medicare spending per enrollee will decelerate in the future, even as the 

enrolled population ages, contributing to the inevitable slowdown in the growth of national 

health spending as a share of GDP.
6

-1%

0%

1%

2%

3%

4%

5%

 1970-1980 1980-2010 2010-2040 2040-2070 2070-2085

Annual Percent Change in Medicare Cost per Beneficiary 

Relative to GDP per Worker: 2015 TR

The degree to which this deceleration in health spending will slow future declines in death 

rates is the subject of considerable debate. However, all evidence suggests that the maximum 

life span for a human being has not been increasing, so future medical advances will only 

lead to more people living longer, closer to the maximum life span. This strongly suggests a 

future deceleration in mortality improvement.

Mortality Improvement by Cause: Past and Future Conditions

Projecting mortality reduction by cause of death allows for a more detailed analysis of past 

declines in death rates. Setting different assumptions for ultimate rates of decline in mortality 

by cause, as well as age, fosters more informed speculation about future trends based on 

current medical research and expectations. Setting different ultimate rates of decline by cause 

of death also results in modest deceleration in the projected overall rate of mortality 

improvement. Limitations on human physiology, as well as on the capacity for expansion of 

health spending, suggest that deceleration will be inevitable in the long run. For many years, 

the Social Security Administration’s Office of the Chief Actuary has used this approach for 

mortality projections. These projections are used as a basis for the annual Social Security and 

Medicare Trustees Reports and many other estimates.

Clinicians and researchers at Johns Hopkins University performed an independent analysis of 

past trends in mortality improvement by age and cause, producing a projection of death rates 

for 2040.

6 The resulting projected mortality improvements by age and cause were 

remarkably close to those projected for recent Trustees Reports. These findings were 

previewed at the Society of Actuaries 2014 Annual Meeting and Exhibit7 in graphs similar to 

those shown below. These graphs illustrate the historical and projected rates of decline in 

death rates for cardiovascular disease, respiratory disease, and cancer, based on the 2014

Trustees Report and the Johns Hopkins study.

 6 Paper by Vladimir Canudas-Romo and co-authors expected to be published in the North American 

Actuarial Journal in 2016. 7 Additional information available at https://www.soa.org/Files/Pd/2014/annual-mtg/2014-orlando-annualmtg-26-0op.pdf.
7

The Johns Hopkins expectations for improvement in mortality due to cardiovascular disease 

through 2040 are much lower at ages 50 and older than was assumed in the 2014 Trustees

Report through 2038 and even beyond.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Under Age 15 Ages 15 - 49 Ages 50 - 64 Ages 65 - 84 Ages 85 and

older

Total

Cardiovascular Disease-Female

Average Annual Percent Reduction

JHU values are for the period 2009-2040

1979 to 2010

2010 to 2038

2038 to 2088

JHU 

0.5

JHU 

1.5 JHU 

1.6

JHU 

1.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Under Age 15 Ages 15 - 49 Ages 50 - 64 Ages 65 - 84 Ages 85 and

older

Total

Cardiovascular Disease-Male

Average Annual Percent Reduction

JHU values are for the period 2009-2040

1979 to 2010

2010 to 2038

2038 to 2088

JHU 

1.1 JHU 

0.6

JHU 

1.5 JHU 

1.6

The Johns Hopkins expectations for improvement in mortality due to respiratory disease are 

more optimistic under age 50, similar between 50 and 84, and less optimistic at ages 85 and 

older than was assumed in the 2014 Trustees Report. The Johns Hopkins results suggest a 

stronger age gradient in mortality decline for this cause of death.

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

Under Age 15 Ages 15 - 49 Ages 50 - 64 Ages 65 - 84 Ages 85 and

older

Total

Respiratory-Female

Average Annual Percent Reduction

JHU values are for the period 2009-2040

1979 to 2010

2010 to 2038

2038 to 2088

JHU 

0.1 JHU 

0.5

JHU 

0.8 JHU 

1.7
8

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

Under Age 15 Ages 15 - 49 Ages 50 - 64 Ages 65 - 84 Ages 85 and

older

Total

Respiratory-Male

Average Annual Percent Reduction

JHU values are for the period 2009-2040

1979 to 2010

2010 to 2038

2038 to 2088

JHU 

0.4 JHU 

0.4

JHU 

0.8

JHU 

1.5

For improvement in mortality due to cancer, the Johns Hopkins expectations are very similar 

overall to those assumed in the Trustees Report, with a slightly stronger age gradient for 

females, and a slightly weaker age gradient for males.

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Under Age 15 Ages 15 - 49 Ages 50 - 64 Ages 65 - 84 Ages 85 and

older

Total

Cancer-Female

Average Annual Percent Reduction

JHU values are for the period 2009-2040

1979 to 2010

2010 to 2038

2038 to 2088

JHU 

0.4

JHU 

0.9

JHU 

1.3 JHU 

1.8

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Under Age 15 Ages 15 - 49 Ages 50 - 64 Ages 65 - 84 Ages 85 and

older

Total

Cancer-Male

Average Annual Percent Reduction

JHU values are for the period 2009-2040

1979 to 2010

2010 to 2038

2038 to 2088

JHU 

0.6

JHU 

1.2

JHU 

1.1 JHU 

1.3
9

Mortality Experience by Earnings Level

We have long recognized that mortality rates and rates of mortality improvement have varied 

by the earnings level of workers, and similarly by income and economic opportunity. 

Differences in mortality and longevity by career earnings level are significant for the 

projected cost and actuarial status of the Social Security program. Cost projections for the 

Social Security program have long reflected this difference by increasing average benefit 

levels within a cohort as the cohort ages to reflect the fact that surviving beneficiaries 

typically have higher benefit levels. This effect is discernable in the historical experience by 

considering the degree to which the average benefit for retired workers of a generation 

increases faster than would otherwise be accounted for by annual cost of living adjustments.

In addition, we have been studying the changes over time in mortality trends by relative 

career-average earnings, which determine the size of benefits under the Social Security 

program. Considered by quartile of career earnings level, some dispersion has clearly 

occurred for death rates at ages 65 through 69 between 1990 and 2010, as shown in the charts 

below, which were presented at the August 2014 Social Security Retirement Research 

Consortium Annual Meeting.

8 We are doing further work in this area and plan to publish our 

results soon.

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1 2 3 4

Female 65-69 Retired-Worker 

Relative Death Rates by AIME Quartile

1990 2010

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1 2 3 4

Male 65-69 Retired-Worker 

Relative Death Rates by AIME Quartile

1990 2010

 8 Additional information available at http://crr.bc.edu/about-us/events/2014-retirement-researchconsortium-meeting/.
10

Recent Experience: Are We in Another Extended Slowdown?

While mortality generally improved rapidly between 1968 and 1982, improvement was 

slower between about 1982 and 1999. Between 1999 and 2009, mortality improvement was 

more rapid, particularly at older ages, largely due to strong 1-year declines in 2004 and 2009. 

However, since 2009, overall mortality reduction has greatly slowed at older ages. It is not 

clear whether this slowdown since 2009 for older ages will persist. However, this recent 

slowdown is a reality check for those who believe that rapid declines in mortality will happen

consistently and indefinitely.

4000

4200

4400

4600

4800

5000

5200

5400

5600

5800

6000

1990 1995 2000 2005 2010 2015

Age-Sex-Adjusted Death Rates

(Ages 65 and Older)

2014TR 2015TR Actual

Projections: Age Gradient, Overall Trend, and Deceleration

The Social Security Advisory Board’s 2011 Technical Panel on Assumptions and Methods

recommended an ultimate rate of decline in death rates of over 1.2 percent per year, for all 

ages, with no deceleration in the future.

9 The 2015 Technical Panel recommended using an 

age gradient and cause-of-death driven deceleration, but settled on a 1.0-percent overall 75-

year average annual rate of decline on an age-sex-adjusted basis, on par with the average 

experience of the last 50 years.

10 This is a somewhat faster rate of mortality decline and 

resulted in a greater shift in the age distribution than that used for the Trustees Reports. 

Therefore, the panel recommendations would result in higher cost as a percent of taxable 

payroll and less favorable actuarial status for the Social Security trust funds.

At the time of the deliberations of the 2015 Technical Panel, most outside demographers, 

including those who were consulted by the panel, were not yet fully aware of the deceleration 

in mortality improvement at older ages since 2009, as data was only available through 2011. 

 9 The full report is available at http://ssab.gov/Details-Page/ArticleID/216/2011-Technical-Panel-onAssumptions-and-Methods-A-Report-to-the-Board-September-2011. 10 The full report is available at http://ssab.gov/Details-Page/ArticleID/656/2015-Technical-Panel-onAssumptions-and-Methods-A-Report-to-the-Board-September-2015.
11

Currently, data is available through 2013, with additional preliminary data available through 

2015. In addition, most demographers generally used historical mortality experience from the 

Human Mortality Database (HMD), which has suggested faster mortality reduction over the 

last 30 years at older ages than has been seen in the more consistent data developed from 

Medicare-enrollee experience. A discussion of this difference, including the graphs below,

was presented in the Office of the Chief Actuary’s Actuarial Note 156.

11

18.5

19

19.5

20

20.5

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Female Period Life Expectancy at age 65

Trustees versus HMDB 

HMDB

Trustees

14

15

16

17

18

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Male Period Life Expectancy at age 65

Trustees versus HMDB 

HMDB

Trustees

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Period Life Expectancy at age 65

HMDB minus Trustees

Male

Female

 11 Available at http://www.ssa.gov/oact/NOTES/pdf_notes/note156.pdf.
12

For reasons not fully understood, the HMD death rates at age 65 and older were generally 

slightly higher than those derived from the Medicare-enrollment data in 1982, but declined 

steadily at a faster rate thereafter. The Medicare-enrollment data are from consistent sources 

with robust age verification. Thus, we conclude that there is a small bias in the HMD data 

that is growing.

Comparison to Other Projections

A further comparison of death-rate projections illustrates the importance of age gradient and 

the data used for fitting a model. Lee recently re-estimated his projections for future 

mortality rates using the Medicare-enrollee experience data for ages 65 and older, rather than 

the data in the HMD.

12 He reran his projections using the Medicare-enrollee data through 

2011.

AGE

1982-1999 1999-2009 2009-2013 2011-2039 2011-2089 2039-2089 2011-2039 2011-2089 2039-2089

0-14 2.79 1.22 2.14 1.58 1.57 1.57 2.77 2.74 2.72

15-49 0.63 0.61 1.06 0.97 0.93 0.90 1.07 1.06 1.05

50-64 1.61 1.27 0.05 1.17 1.09 1.06 1.34 1.34 1.34

65-84 0.92 2.11 0.91 1.09 0.86 0.74 1.06 1.06 1.05

85+ -0.18 1.30 -0.11 0.64 0.53 0.48 0.65 0.64 0.63

65+ 0.51 1.78 0.48 0.89 0.71 0.61 0.88 0.86 0.85

Total 0.75 1.59 0.48 0.95 0.80 0.71 0.99 0.96 0.94

* Fit 1950-2011, using Medicare-enrollment data for 65 and over, rather than HMD data

2015TR Intermediate

Comparison of Historical, 2015 Trustees Report, and Lee* 

Average Annual Rates of Decline in Age-Sex-Adjusted Death Rates

Historical (Dec 2015 data) Lee

Lee’s new results are striking. Using the Lee and Carter (LC) extrapolation method, he 

projects the average annual rate of decline in mortality for all ages combined at 0.99 percent 

per year through 2039, slightly higher than the average 0.95 percent annual reduction used in 

the 2015 Trustees Report. Because the LC method essentially allows for no deceleration in 

age-specific death rates, this approach sustains indefinitely the age-specific rates of 

improvement derived from the historical experience for 1950 through 2011, including the 

dramatic post-WWII and post-Medicare/Medicaid periods. 

0

1

2

3

4

5

6

7

8

1900 1920 1940 1960 1980 2000 2020 2040 2060 2080

Mortality Rate Comparison Age 0-14 Unisex

Historical 2015TR Lee

 12 Unpublished analysis sent by Dr. Lee to the Office of the Chief Actuary in January 2016.
13

7.5

8

8.5

9

9.5

1900 1920 1940 1960 1980 2000 2020 2040 2060 2080

Mortality Rate Comparison Age 65+ Unisex

Historical 2015TR Lee

Because the LC method fits to each age-gender group separately, this projection captures and 

maintains the entirety of the strong age gradient in past mortality improvement experience. 

With this relatively strong age gradient, Lee’s projections expand the younger working-age 

population faster than the aged population for many years into the future, to a greater degree 

than the actuarial projections in the 2015 Trustees Report. The graph below illustrates that 

the age distribution of the population under Lee’s mortality projection is more favorable for 

Social Security financing than it is using the 2015 Trustees Report mortality projection, until 

a point after 2050. At that point, the lack of any deceleration in Lee’s projections

overwhelms the stronger age gradient and the aged dependency ratio becomes less favorable 

(higher) under Lee’s projection.

 

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Aged Dependency Ratio 2015 TR

Population 65+/(20-64)

Actual and TR Intermediate

TFR remains at 3.0 after 1964

TFR remains at 3.3 after 1964

Lee
14

Overall, Lee’s age distribution is more favorable for the first half of the 75-year projection 

period and less favorable for the latter half. As a result, incorporating his results into the 

Trustees Report model leads to an actuarial status over the full 75-year projection period that 

is very close to the results in the 2015 Trustees Report. This finding illustrates the power of a 

mortality improvement age gradient to affect the age distribution of the population and, in 

turn, the actuarial status of the Social Security trust funds.

In essence, Lee’s latest projection retains both the age gradient and the rate of decline of the 

period from 1950 to 2011 as a basis for the future projection. The actuarial mortality 

projections for the 2015 Trustees Report assumed some compression of the age gradient, but 

also some gradual deceleration in the rate of mortality decline, presuming that the 

exceptional gains from 1950 to 2011 will not continue at the same rate indefinitely. While the 

two approaches result in the same actuarial status for the next 75 years as a whole, Lee’s 

projections result in lower Social Security cost as a percent of payroll through 2056, with the 

reverse thereafter, because Lee’s method allows for no deceleration of mortality 

improvement. (See the graph below.) If Lee’s method were modified to allow for some 

deceleration in future mortality reduction relative to the experience of 1950-2011, his 

projections would result in a more favorable actuarial status for the Social Security trust 

funds over the next 75 years than is shown in the 2015 Trustees Report.

13.5

14.0

14.5

15.0

15.5

16.0

16.5

17.0

17.5

18.0

18.5

2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090

Projected OASDI Cost as Percent of Taxable Payroll 

Cost Rate TR2015

Cost Rate Lee

A final note on the projections by both Lee and the Office of the Chief Actuary is that 

mortality experience since 2011 has continued to show much less improvement than 

expected. Incorporating this more recent experience in the same projection methods will 

result in lower projected improvement in mortality in the future, and thus more favorable 

estimates of actuarial status for the Social Security trust funds.
15

Conclusion

By law, the Trustees report to the Congress annually on the actuarial status of the Social 

Security and Medicare programs. The Office of the Chief Actuary’s mortality projections 

have been fairly accurate over the years and have provided a sound basis for evaluating the 

actuarial status of both programs. 

Mortality improvement in the twentieth century was remarkable, reflecting dramatic 

improvement in the economy, personal income, health research, national health expenditures, 

and broad access to health care. With inevitable deceleration in health care expenditures as a 

percent of GDP and a rising share of the population in retirement, the conditions that 

contributed to the mortality declines in the twentieth century are unlikely to be sustained in 

the future. In addition, limitations on human physiology and senescence seem likely to 

contribute to deceleration. Assumptions for future reduction in death rates by cause of death 

used in recent Trustees Reports have been corroborated by recent independent analysis from 

clinicians and medical researchers at Johns Hopkins University.

The historical age-gradient in mortality decline is undeniable, and uncertain only in the 

degree to which it will persist. Recent work by Lee demonstrates that retention of the full 

historical age-gradient in mortality improvement with no future deceleration in improvement, 

through use of the Lee and Carter method, has essentially the same implications for Social 

Security actuarial status as the mortality projections used in the Trustees Reports. The 

actuarial projections used in the Trustees Report assume a reduced age gradient relative to 

the past and a modest deceleration in age-specific mortality improvement.

Future analysis and experience will continue to evolve, and future projections will

undoubtedly vary. The results presented in this note suggest that current mortality projections 

used in the Trustees Reports provide a solid basis for evaluating the actuarial status of the 

Social Security program.