BlackRock CEO Larry Fink Calls for Investing Social Security to Boost Returns
More than 70 million Americans – including retirees, disabled individuals, and families – rely on Social Security benefits for monthly income. Despite its success in preventing poverty, BlackRock CEO Larry Fink argues the program could be improved by allowing a portion of its assets to be invested for potentially higher returns.
Social Security’s Current Investment Strategy
As a pay-as-you-move program, Social Security is primarily funded by payroll taxes. Both employers and employees contribute 6.2% toward the program, while self-employed individuals 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 bonds.
In 2025, the combined retirement and disability trust funds earned a 2.6% annual effective interest rate, according to the Social Security Administration.
Fink’s Proposal: Diversification for Growth
Fink contends that Social Security’s returns lag behind the broader market. In 2025, the S&P 500 rose approximately 16%, and a 60/40 portfolio of stocks and bonds yielded nearly 15%, based on Morningstar data . He suggests allowing a portion of the system to be invested more like long-term pension plans, diversified across a range of assets, to potentially generate higher returns and address the program’s financial shortfall without cutting benefits.
“Could a portion of the system be invested more like other long-term pension plans — carefully, broadly, and over decades — while ensuring the program remains a strong safety net?” Fink wrote in his annual letter to investors.
Fink clarified that his proposal is not about “privatizing” Social Security or fully exposing it to the stock market. Instead, he envisions a measured approach similar to the federal Thrift Savings Plan (TSP), which offers participants a menu of investment choices.
Concerns and Counterarguments
Some critics argue that allowing private firms to manage Social Security assets could introduce risk and potentially lead to losses, particularly during market downturns. Rep. John Larson, D-Conn., pointed out that Social Security has consistently delivered payments, even during crises like the 2008 financial crisis, unlike 401(k)s.
Yet, proposals like the one from Sens. Bill Cassidy, R-La., and Tim Kaine, D-Va., suggest creating a new $1.5 trillion fund invested in stocks and bonds to supplement, rather than replace, the existing trust funds. Alicia Munnell, senior advisor at the Center for Retirement Research at Boston College, expressed concerns about the Cassidy-Kaine plan, citing the cost of borrowing and potential distraction from addressing the core imbalance between reserves, and payments.
The Urgency of Reform
The Social Security Administration projects that the retirement trust fund may be depleted by 2032. If Congress doesn’t act before then, policymakers may be forced to implement benefit cuts. Fink emphasizes the importance of addressing the issue now, stating, “The cost of waiting is only getting higher.”
Lawmakers are scheduled to discuss the program’s future at a Senate committee hearing on Wednesday.