Social Security doesn’t let Americans ‘build wealth’: BlackRock’s Fink
Blackrock CEO Larry Fink speaks on the CNBC set at the New York Stock Exchange on April 11, 2025.
Timothy A. Clary | Afp | Getty Images
more than that 70 million Americans, including retirees, disabled individuals and families, rely on Social Security benefits for monthly income.
BlackRock CEO Larry Fink wrote that it was “one of the most effective anti-poverty programs in history.” annual president’s letter It was announced to investors on Monday. Citing Census data, Fink wrote that Social Security keeps an estimated 29 million Americans out of poverty each year.
According to Fink, even with this “remarkable success” the 90-year-old program could be improved upon.
“The problem is this: Social Security provides stability, but it does not allow most Americans to build wealth in a way that grows with their country,” Fink wrote.
Fink calls for investment on behalf of Social Security
As a pay-as-you-go program, Social Security is largely It is financed by payroll taxes. Both employers and employees will contribute 6.2% to the program, while self-employed individuals will pay 12.4% on earnings up to $184,500 in 2026.
Money not immediately used to pay benefits is deposited into Social Security’s trust funds, which are invested in U.S. Treasury securities.
Combined retirement and disability trust funds, Effective interest rate of 2.6% per year According to Social Security Institution data, in 2025.
Meanwhile, the stock market made significant gains last year; The S&P 500 is up about 16%. 60/40 stock and bond portfolio almost 15% increase Based on the performance of the Morningstar US Intermediate Target Allocation Index to 2025.
In his letter, Fink questioned whether Social Security assets should be allowed to grow as the economy expands. Doing so could yield higher returns and help repair the program’s fiscal deficit without changing benefits.
“Can a portion of the system be carefully, broadly, and invested over decades, similar to other long-term retirement plans, while still ensuring the program remains a strong safety net?” Fink wrote.
This isn’t the first time Fink has come up with this idea. At BlackRock’s retirement summit in March 2025, Fink likewise called for more aggressive investing on behalf of Social Security.
Fink stated at the time that he would not use the term “privatization” to describe these efforts and reiterated this in his new letter.
“This does not mean privatizing Social Security or putting it all in the stock market,” Fink wrote. “This would mean introducing a diversification measure” similar to the federal Thrift Savings Schemes which allow participants to choose from: investment options menu.
Some critics said such a move would privatize the program and help private investment companies manage the public program’s assets.
D-Conn. Private companies can help provide returns that better reflect the market, but can also leave funds at higher risk of loss and underperformance, representative John Larson told CNBC.com in March 2025.
Larson said Social Security has never missed a payment, even during sharp market declines that hurt 401(k) balances, such as during the 2008 financial crisis.
But other lawmakers — Sen. Bill Cassidy, R-La. and Tim Kaine, D-Va. – they proposed creating a new fund of $1.5 trillion to be invested in stocks and bonds. The strategy would complement rather than replace Social Security’s existing trust funds. Returns from the new fund could help close Social Security’s trust fund gap without changing benefits, Fink wrote.
One October briefingAlicia Munnell, a senior advisor at the Boston College Center for Retirement Research, called the Cassidy-Kaine plan “a massive and risky financial maneuver with little payoff.” Returns would be limited by the cost of borrowing, Munnell said, and would distract Congress from addressing the imbalance between Social Security’s trust fund reserves and benefit payments.
‘The cost of waiting is increasing’
Social Security’s trust fund for retirement benefits could be depleted by 2032, according to the Social Security Administration’s latest estimates. If Social Security reform is not enacted before then, policymakers faces a tough choice on how to implement benefit cuts.
Fink said in his letter that he was criticized two years ago for suggesting that a fix to Social Security was needed and that he would likely face renewed scrutiny.
“But if there’s one thing I’ve learned in my 50 years in finance, it’s that the problems we don’t talk about should worry us the most,” Fink wrote. “That’s why we need to talk now, because the cost of waiting is getting higher and higher.”
MPs and experts are scheduled to discuss the future of the program in the Senate Committee hearing Wednesday.
