According to new analysis from the Center for Retirement Research at Boston College, big gains in life expectancy among the richest Americans, compared to much more modest ones for the less well off, have given the wealthy more time to collect Social Security benefits.
Life expectancy for the wealthy born just over a century ago, in 1912, was only 0.7 years longer than for their contemporaries with below median earnings. That figure has grown to 5.3 years for those born in 1941. Just how much does this add up to in Social Security benefits? Someone born in 1960 whose earning put them the lowest income quintile can expect to collect $122,000 in retirement, on average, measured in 2009 dollars. That same person born in 1930 is likely to end up collecting $126,000 in Social Security benefits.
To be sure, top earners have always been able to expect bigger Social Security benefits: They pay more into the program. But as they live longer and longer, the size of their payouts have steadily increased. Top earners born 1960 can expect to collect $295,000 throughout their lives, up from $229,000 for someone born 30 years earlier—an increase of 29%.
The easiest way to increase your Social Security benefit is to wait until age 70 to start collecting. But if your health is flagging, you may not have a choice. And given the fact that wealthier Americans also tend to be healthier, it’s yet another regressive feature of the system.
You can find the full article at Time Magazine.