Social Security Age

There is a science story that many of us have heard. If you put a frog into a pot of hot water, it will jump out. If, however, you put the frog into water at room temperature and then slowly heat it, the frog will stay in it until it dies. 

That is not actually true. Frogs are smarter than that. However, the point it makes is that sometimes things sneak up on us. The result is that there is no easy or quick solution by the time we recognize it.

There are examples of this kind of behavior in our own world. Medicare offers one of those examples.

In the 1800’s people worked until they died (85 percent of individuals) or became disabled (15 percent). There were no pensions. After the Civil War, pensions first became available. By 1910, 90 percent of Union Civil War veterans were on pensions. By 1935 (75 years after the Civil War began), most had died.

The Great Depression started in 1929. In August 1935, Social Security was enacted to provide for older citizens. At the time of its enactment, the average life expectancy in the U.S. was 60.7 years. That means that over half the population died before that age. So picking the number 65 was logical.

When Medicare was enacted in 1965, it too used the age of 65 years. By that time life expectancy had moved to 70.11 years. Thus both Social Security and Medicare were then using an age which over half the population achieved. That was different than what had happened in 1935.

In 1983, a law was passed moving Social Security age gradually to 67 years. Unfortunately, by that time average life expectancy was up to 74 years.

In 2019, life expectancy was at 78.79 years. That meant that over half the population received both Medicare and Social Security benefits for about 14 years.

Darwin’s law of survival of the fittest occurred due to COVID-19 so that by 2021, the life expectancy had dropped to 76.33 years because of all the deaths. As the pandemic ended, life expectancy had climbed back to 77.43 years by 2022. It was 78.4 in 2023. In 2024, it passed pre-COVID levels and was up to 79.25 years.

The main reason both Medicare and Social Security are having financial issues is the failure to index the age levels for life expectancy over time. It is far too late to try and remedy that at this point in time. Other options will need to be found. We have become the proverbial frog watching the water heat up over time.