How Has Longevity Variation Changed Over Time? – Center for Retirement Research

Executive Summary

The uncertainty of one’s life expectancy is a major difficulty in retirement planning and provides the impetus for insurance products that guarantee a lifetime income. It is well known that these differences in longevity differ between demographic and socioeconomic groups, but the patterns of these differences over time have not been studied.

This paper examines trends in differences in longevity across groups, conditional on different starting ages, and the passage of time, and estimates the magnitude of the differences in dollar terms using a wealth-equity approach to rapid income. Specifically, the analysis takes into account the following demographics, all broken down by gender: total US population, low/high education White and Black populations, and annuitants. Life tables are estimated, as necessary, to supplement published life tables needed to determine life expectancy and age-at-death differences for individuals. The tables used to calculate these metrics are conditional on living to ages 50, 62, 67, and 70, all of which are chosen to represent important ages in terms of retirement planning and policy.

Analysis finds:

1. Differences in population longevity have generally remained stable since the 1970s.
2. Black and less educated people tend to experience greater life expectancy disparities compared to their White and more educated counterparts at all ages.
3. Across all racial education groups examined, the difference in longevity has increased, except for Black men with low education.
4. Annuitants typically experience less dispersion in life expectancy than the average 50-year-old population for all ages.
5. Changes in longevity differentials from 2000 to 2019, holding life expectancy constant, would be associated with a 1.3 to 2.0 percent increase in the number of immediate annuities, all else lagged, for the general population, and changes for small groups ranging from percent 6.1 (Black males with low education) to 13.6 percent (Black males with high education).