In the aftermath of COVID-19, which invaded our lives in early 2020, we were informed of a disturbing societal trend. Between 2019 and 2020, Americans’ life expectancy at birth fell by 1.8 years, reversing a series of increases we have enjoyed for decades. Worse yet, between 2020 and 2021, life expectancy from birth dropped further, this time by nearly one full year.
Medicine, nutrition, and lifestyle choices have combined over many years to elevate our life expectancies. So much so, in fact, that the life insurance industry recently changed its mortality tables to reflect those increases. Following that fact, Congress changed both the formulas and start dates for Required Minimum Distributions (RMDs) from Qualified Retirement Accounts, reflecting retirees’ increasing longevity.
What do these revelations mean to you, as Americans and as investors? Will the insurance industry and IRS now revert to their prior life expectancy tables? Not a chance, and here’s why.
First, in the beginning paragraphs we noted that recent life expectancy revisions apply to newborns. Individual mortality factors vary in both nature and number over time. In adulthood, many mortality factors have essentially dissipated, though others begin taking their places. Among the deadliest factors is inexperienced driving, which sharply declines with ages over 21.
Another significant factor is illegal Fentanyl, which is only marginally related to COVID-19. There seems to be a correlation between school-age students being forced to stay home, and consequent drug use. With the proliferation of Fentanyl in the past 2 or 3 years, young people have been dying from overdoses at a rate of about 109,000 annually. While this has a negligible impact on the life expectancy of today’s adults, it is very significant for the young.
Murder rates in cities are also on the rise and tend to disproportionately affect young people. Gun and knife homicides are rampant in almost every major metropolitan area.
Conversely, COVID-19 has been deadlier for older people. However, the virus is age indiscriminate among people with significant co-morbidities, including obesity, which spans all age groups.
While infants born today have a life expectancy in their 70s, Americans who attain age 65 will likely live into their 80s. Assuming they have been cautious by adopting lifestyles that seriously reduce the chances of COVID infections, they will, on balance, live longer than at any time in the past.
Despite the new statistics.Van Wie Financial is fee-only. For a reason.
