BlackRock’s Billionaire CEO Says Wall Street Can Fix Social Security. Could It Work?

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Retirement Social Security Share Share Close Mail Page URL https://money.com/social-security-stock-market-risk/ Link copied! BlackRock's Billionaire CEO Says Wall Street Can Fix Social Security.

Could It Work? By: Martha C. White Martha C. White Writer | Joined March 2026 Has also written: Retiring in the Next 5 Years? Do This to Protect Your Nest Egg From Market Volatility It's Only March, but Millionaires Have Already Stopped Paying Into Social Security for the Year Millions Face a Tax Shock on Social Security Back Pay.

Congress Is Racing to Fix It Workers Think They'll Need $1 Million to Retire.

Actual Retirees Get by With Less New IRS Rules for 2026 Will Allow You to Contribute More to Your 401(k) and IRA See full bio Editor: Katherine Peach Katherine Peach Associate Editor | Joined January 2025 Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. Has also written: New Bill Aims to 'Actually' End Taxes on Social Security Inflation's Silver Lining: The Social Security COLA Estimate for 2026 Is Up Social Security Recipients Are on Track for a 2.5% Raise Next Year Why Some Social Security Recipients Won't Get Payments in June The Trump Administration Is Clawing Back Social Security Overpayments. Here's What to Know See full bio Published: Mar 25, 2026 4:19 p.m. EDT 7 min read Money; Getty Images A hedge fund CEO is advocating for the government to invest Social Security money in the market. But experts worry this would create a windfall for Wall Street — not retirees. Larry Fink, chairman and CEO of BlackRock, is urging policymakers to consider using America’s flagship safety-net program like a giant brokerage account — using borrowed money. In his annual investor letter, the hedge fund titan advocates for what he calls “market-based approaches.” He writes, “Could a portion of the [Social Security] system be invested more like other long-term pension plans?” Experts are skeptical. In a 2023 paper, researchers from the Center for Retirement Research at Boston College write, “Equity investments involve greater risk.” And that risk could be significant. While the S&P 500 had returns of nearly 16% last year and averages about half of that over the long term, this forward momentum isn’t consistent. In 2008, for instance, the value of the S&P fell by nearly 40%. Another key issue, according to Michael Wicklein, currently a Ph.D. student at the University of Chicago and one of the authors of the paper, is “where the money to invest would come from.” Where People Are Investing Right NowMotley Fool's monthly stock recommendations — get expert advice and portfolio strategies'The Higher the Balance, the More You'll Earn': Open a savings account with CIT Bank and get 3.75% APYCheck out SoFi's no commission investing platform “Because Social Security is already facing a projected shortfall, building up a meaningful pool of assets would likely require either higher payroll taxes or borrowing from general revenues,” he tells Money via email. Neither of those two options, he adds, would address the program’s two trust funds becoming insolvent in just six years. In the BlackRock letter, Fink references a proposal advanced by Sens. Bill Cassidy (R-La.) and Tim Kaine (D-Va.) that would create a new, $1.5 trillion investment fund for the benefit of retirees. “I’m skeptical that that will help out the Social Security trust fund to any meaningful degree — or beneficiaries,” says Mark Zandi, chief economist at Moody’s Analytics. Zandi raises two primary concerns about this plan. For starters, the government would have to pay someone to manage all that money. "Wall Street is going to want a fee," he says. Those fees would reduce investment earnings. A bigger problem: Like Wicklein, Zandi points out that the only way for the Treasury to “create” a $1.5 trillion pool of money is to borrow it, either by taxing Americans more or by issuing debt. Combined with management expenses, the cost of servicing this debt would put a significant dent in the premium the government — in other words, taxpayers — could earn from taking on investment risk. The authors of the 2023 paper come to a similar conclusion, writing, “borrowing to [invest in equities] does not guarantee any additional resources for Social Security.” They acknowledge that the idea has appeal, but given the increased risk and cost of borrowing and managing the funds, “the time may have passed for raising taxes enough to accumulate a large enough trust fund to make the effort worthwhile.” Other policy experts use stronger language to describe the proposal. "This is a dangerous debt-funded gamble that would come with huge risks and costs," the nonpartisan Committee for a Responsible Federal Budget writes in an analysis published this week. What should the role of Social Security be, anyway? “Social Security provides stability, but it doesn’t allow most Americans to build wealth in a way that grows with their country,” Fink writes in his investor letter. This isn't wrong. But the idea that people should rely on Social Security to grow their net worth in the first place is misguided, Zandi says. "Social Security is income support for disability and old age. I don’t know if that's the vehicle you want to use to help build wealth," he says. "[It] is designed to provide support to all Americans. Given that objective, you want to be as conservative as possible and as prudent as possible." Where People Are Investing Right NowMotley Fool's monthly stock recommendations — get expert advice and portfolio strategies'The Higher the Balance, the More You'll Earn': Open a savings account with CIT Bank and get 3.75% APYCheck out SoFi's no commission investing platform People build wealth by investing in stocks or bonds, buying homes and earning interest on their savings. Although Fink makes the point that a lot of Americans don’t have the opportunity to do this, Zandi says there are plenty of other ways policymakers and corporate executives could make these wealth-generation methods more accessible and incentivize people to build a nest egg. The traditional model of retirement financing is often described as a three-legged stool. Ideally, retirees would be able to draw income from a combination of Social Security, employer pensions and private investments like 401(k)s and brokerage accounts. Private investment returns fluctuate according to market performance. Pension funds hire professionals to manage investments in a mix of assets, which they do with varying degrees of success. “Even though the stock market grew by more than 40% from 2023 to 2025, pension funds only earned a 15% return on their assets over that period," another Center for Retirement Research paper notes. Social Security, on the other hand, was designed to be insulated from the risk of loss. Its rapidly shrinking trust funds are held in ultra-safe U.S. government debt. The lower yield of Treasurys compared to stocks isn’t a flaw that needs fixing. It’s a safety premium that allows Social Security to serve as a stable source of income. "You want to invest that in the safest thing on the planet,” Zandi says. "That’s got to be rock solid." More from Money: Millions Face a Tax Shock on Social Security Back Pay.

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