The Social Security Trust Fund is off on its prediction by $730 billion for needed benefits in 2030. That is because its forecasting methods have hardly been updated since 1935 when the program first started, according to a study in the August issue of Demography.
Two researchers, Samir Soneji of The Dartmouth Institute for Health Policy & Clinical Practice and Gary King of Harvard's Institute for Quantitative Social Science, in the article titled, "Statistical Security for Social Security," found that the financial viability of Social Security, the single largest U.S. government program, is in jeopardy because of outdated forecasting methods.
The researchers began their research by detailing information necessary for replicating the Social Security Administration's forecasting procedures, previously unavailable in the public domain. Then they offered a way to improve the quality of the procedures via age- and sex-specific forecasts, and included risk factors such as smoking and obesity, consistent with long-standing demographic patterns.
"Including this extra information makes a substantial difference," they said. "For example, by improving only mortality forecasting methods, we predict three fewer years of net surplus, $730 billion less in Social Security Trust Funds-"
The researchers determined that the population would live longer, on average, than the SSA forecasts because of successes in the medical community. Smoking is in historic decline and prevention and treatment of cardiovascular disease is a success, both adding years to lives. While obesity will likely take its toll, this social and behavioral failure will unlikely outweigh medical and public health triumphs, they said.