Little is known about the severity and long-term health and economic consequences of sarcopenia. We developed a sarcopenia index to measure severity in older Americans and estimated the long-term societal benefits generated by effective interventions to mitigate severity. Using a micro-simulation model, we quantified the potential societal value generated in the US in 2010–2040 by reductions in sarcopenia severity in older adults. All analyses were performed in Stata and SAS. Secondary data from the National Health and Nutrition Examination Survey (NHANES) (N = 1634) and Health and Retirement Study (HRS) (N = 952) were used to develop a sarcopenia severity index in older adults. Multitrait multi-method and factor analyses were used to validate and calibrate the sarcopenia severity index, which was modeled as a function of gait speed, walking without an assistive device, and moderate physical activity. In representative elderly populations, reducing sarcopenia severity by improving gait speed by 0.1 m/s in those with gait speed under 0.8 m/s generated a cumulative benefit of $65B by 2040 (2015 dollars). Improving walking ability in those with walking difficulty generated cumulative social benefit of $787B by 2040. Reducing sarcopenia severity would generate significant health and economic benefits to society— almost $800B in the most optimistic scenarios.