While Americans have been living longer, a new report suggests that that trend could slow in the future — and that could have an impact on pension calculations and retirement projections.
According to “Longevity Trends in the U.S.,” a report by consulting firm Towers Watson, U.S. mortality improvement will moderate in the coming years, primarily because some of the diseases with the largest rates of improvement — heart disease, stroke and cancer — will represent a smaller portion of total deaths in the future.
Not that we won’t be living longer (see our recent post on mortality assumptions), but the rate of improvement in those trends may slow.
A cause-of-death model developed by Towers Watson, which uses a blended age- and cohort-based approach, projects that those diseases will be replaced by causes of death where mortality is not improving — or is actually deteriorating — such as Alzheimer’s and accidents. The result, according to Towers Watson, is that future mortality improvement levels may drop to 50% of their near-term levels in approximately 30 years.
The report concludes that socioeconomic factors play a greater role in longevity than most have realized. Specifically, that individuals at the upper end of the socioeconomic spectrum can be expected to have mortality improvement rates in excess of 1% higher than those at the lower end, which the report says can have a significant impact on some insured populations. Various factors underpin the improved mortality associated with higher socioeconomic levels, such as increased access to medical care, greater awareness of personal health issues and lower job-related risks.
The report addressed several factors that will impact mortality in the future, including:
- obesity;
- universal health care;
- medical technology;
- drug efficacy in the long term; and
- new diseases.
