Social Security doesn’t allow Americans to ‘build wealth’: BlackRock’s Fink

More than 70 million Americans, including retirees, people with disabilities, and their families, rely on Social Security benefits for their monthly income.

BlackRock CEO Larry Fink called it “one of the most effective anti-poverty programs in history,” in his annual chairman’s letter to investors released Monday. Citing census data, Fink wrote that Social Security lifts an estimated 29 million Americans out of poverty each year.

Even with its “extraordinary accomplishments,” Fink said the 90-year-old program could be improved.

“The problem is that while Social Security provides stability, it does not allow most Americans to build wealth in a way that grows with the country,” Fink wrote.

Social Security, a pay-as-you-go program, is primarily funded by payroll taxes. Both employers and employees contribute 6.2% to the program, while self-employed individuals pay 12.4% on income up to $184,500 in 2026.

Money not immediately used to pay benefits is placed in a Social Security trust fund and invested in U.S. Treasury bonds.

According to data from the Social Security Administration, the retirement and disability trust funds combined had an annual effective interest rate of 2.6% in 2025.

Meanwhile, the stock market rose significantly last year, with the S&P 500 index up about 16%. Based on the performance of the Morningstar U.S. Moderate Target Allocation Index, a 60/40 portfolio of stocks and bonds rose nearly 15% in 2025.

In his letter, Mr. Fink questioned whether Social Security assets should be allowed to grow in line with the overall economy. Doing so may result in higher returns and help make up for the program’s financial shortfalls without changing benefits.

“Can we invest a portion of the plan as carefully, broadly, and over decades as any other long-term pension plan, while ensuring that the plan remains a strong safety net?” Fink wrote.

This isn’t the first time Fink has floated this idea. At BlackRock’s March 2025 Retirement Summit, Fink similarly called for more aggressive investing on behalf of Social Security.

Mr. Fink said at the time that he did not intend to use the word “privatization” to describe these efforts, and reiterated that in a new letter.

“This does not mean privatizing Social Security or putting it all into the stock market,” Fink wrote. It “means introducing diversification measures” similar to the federal government’s Thrift Savings Plan, which allows participants to choose from a menu of investment options.

Some critics say the measures would privatize the program, allowing private investment firms to help manage public program assets.

Rep. John Larson, D-Conn., told CNBC.com in a March 2025 interview that while private companies could help provide returns that better reflect the market, they could also increase the risk of funds losing money or underperforming.

Larson said Social Security has never missed a payment, even during market crashes that hurt 401(k) balances, such as the 2008 financial crisis.

But other members of Congress, Sen. Bill Cassidy (R-Louisiana) and Sen. Tim Kaine (D-Virginia). — proposed creating a new $1.5 trillion fund to be invested in stocks and bonds. This strategy would complement, rather than replace, Social Security’s existing trust funds. Revenue generated by the new fund could help make up for shortfalls in Social Security’s trust fund without changing benefits, Fink wrote.

Alicia Munnell, a senior adviser at Boston University’s Center for Retirement Research, called the Cassidy-Cain plan “a huge, risky fiscal maneuver with very little return” in an October briefing. Revenue would be limited by borrowing costs and would distract Congress from addressing imbalances in Social Security trust fund reserves and benefit payments, Munnell said.

Social Security’s trust funds used for retirement benefits could be depleted by 2032, according to the Social Security Administration’s latest projections. If Social Security reform is not passed by then, policymakers could face difficult choices about how to implement benefit cuts.

In his letter, Fink said he was criticized two years ago for suggesting that Social Security needed fixes, and will likely come under scrutiny again.

“But if there’s one thing I’ve learned in my 50 years in the financial industry, it’s that the issues we should be most concerned about are the ones that aren’t being talked about,” Fink wrote. “And that’s exactly why we need to have the conversation now, because the cost of waiting will only get higher.”

Lawmakers and experts are scheduled to discuss the program’s future at a Senate committee hearing Wednesday.