Social Security: Is This Interesting Trend Reducing Your Benefits?

A recent study suggests that life expectancy is heavily influenced by race and education. Here's why this matters for people on Social Security.

Jun 13, 2014 at 5:06PM


At first glance, it seems that Social Security benefits have nothing to do with race or education, the amount you receive in lifetime payments is simply a function of how much you earned prior to retirement, when you elect to receive benefits, and how long you live.

But it turns out that there's more to this story. Specifically, recent research suggests that the total size of one's lifetime benefits may indeed, at least in part, be determined by race and education.

Race, education, and life expectancy
What I'm referring to here is a study initiated by the MacArthur Foundation to "better understand the factors that drive past, current, and future trends in longevity."

What the authors found is unsettling. In the first case, they concluded that certain segments of the American population are experiencing decreases in life expectancy.

Between 1990 and 2008, white males and females with less than 12 years of education saw their average life expectancy drop from 74.5 down to 70.5, with a slightly more significant decline for females.


The authors also discovered that the gap in life expectancy between the least- and most-educated segments has grown over the same time period irrespective of race.

In 1990, the segment of highly educated white males outlived its least-educated counterparts by 4.9 years; today the gap is nearly three times as large at 12.9 years.

And a similar story is true for black males, where the life expectancy gap between the least- and most-educated groups went from 6 years to 9.7 years over the same 18-year stretch.


Life expectancy and Social Security
While these trends are disturbing in and of themselves, this is particularly apparent when it comes to Social Security.

I say this for two reasons.

The first is that life expectancy, at least theoretically, should weigh heavily on one's decision of when to take Social Security benefits. Namely, the longer you expect to live, the longer you should try to hold out -- this is assuming, of course, that you have the luxury of waiting.

And second, life expectancy plays a central role in the cumulative amount of benefits that retirees receive from the system -- the shorter your lifespan, the smaller your cumulative lifetime benefits.

The net result is that there is almost certainly a direct correlation between race and education on the one hand and Social Security benefits on the other.

Now, just for the record, this isn't an intentional policy on behalf of the U.S. government. It's rather an innocent consequence of demographics.

That being said, prospective retirees would be smart to keep these factors in mind as you approach the decision of when to begin drawing from the system.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers