Major Social Security Change for Millions Proposed to ‘Build Wealth’

Larry Fink, CEO of multinational investment company BlackRock, has proposed a major change to how Social Security operates.

In an investor letter released on Monday, Fink argued that the nearly century‑old program provides stability but fails to help Americans build long‑term wealth.

“In effect, workers lend money to the government and receive defined benefits in return,” Fink said. “The structure, designed as a social insurance program, emphasizes stability and predictability. What it doesn’t do is let people grow their benefits along with the broader economy.”

Because of this, Fink called for a revamp of Social Security that would allow at least part of the system’s assets to be invested in a broader range of investments, similar to long‑term pension plans, rather than being almost exclusively tied to U.S. Treasury bonds.

Why It Matters

More than 70 million Americans rely on Social Security for monthly income, making it one of the most important federal programs in the country. 

While Social Security has been effective at preventing poverty, keeping an estimated 29 million Americans out of poverty each year, according to Census data, it does not allow most workers to benefit from broader economic growth over time. 

Under current law, surplus Social Security funds are invested in U.S. Treasury bonds, which earned about a 2.6 percent return in 2025, far below gains seen in financial markets during the same period. ‘

What To Know

Fink described Social Security as “one of the most effective poverty‑prevention programs in history,” saying that it plays a critical role in supporting retirees, disabled individuals and families who rely on monthly benefits. 

However, he said that the program’s structure limits its ability to generate wealth over time.

“The issue is: Social Security provides stability, but it doesn’t allow most Americans to build wealth in a way that grows with their country,” Fink wrote in the letter. 

Currently, Social Security operates as a pay‑as‑you‑go system, funded primarily through payroll taxes. Employers and employees each contribute 6.2 percent of wages, while self‑employed workers pay 12.4 percent on earnings up to a set annual cap. 

Money not immediately used to pay benefits is placed into Social Security Trust Funds, which by law are invested in U.S. Treasury bonds. Those trust funds earned an effective annual interest rate of about 2.6 percent in 2025, according to SSA data.

Broader financial markets posted much stronger gains over the same period, which Fink highlighted to argue that Social Security assets are not benefiting from long‑term economic growth.

Fink proposed the idea that a portion of Social Security’s assets could be invested more like other long‑term retirement systems, carefully diversified over decades, while still preserving the program’s role as a safety net.

“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 said in the letter. 

He added that his proposal is not meant to privatize Social Security or eliminate its guaranteed benefits. Instead, he framed the idea as a potential supplement that could improve returns and help address the program’s long‑term financial challenges without cutting benefits.

Still, financial experts cautioned that there are some risky elements to Fink’s proposal.

“Fink is right about one thing. Social Security’s current structure doesn’t let people ‘grow with the economy.’ It’s designed as insurance, not wealth accumulation,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek. “That’s intentional. It pays a modest, predictable check for life, indexed to inflation, and survives market crashes. For 29 million Americans it keeps out of poverty annually, that predictability matters more than beating the S&P 500.

“But Fink’s proposal introduces sequence risk and market timing risk to the safety net. If a worker’s $1.5 trillion diversified fund gets hammered in 2031 or 2040 when they’re ready to retire, what happens? They’re still waiting for their Treasury bonds to pay out? Or they take massive losses because they needed the money at the wrong time?”

What People Are Saying

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “Proposals like this are not new and have been suggested for the better part of the last 20 years as a way of potentially solving both the solvency issue of Social Security and inflation concerns for tens of millions of current and future beneficiaries.

“Social Security is currently facing two crucial problems: its trust fund is expected to finally run out in 2032 if no legislative action is taken, and inflationary pressures continue to eat away at parts of beneficiaries’ monthly payments. Investing a portion of Social Security taxes or the trust fund could be seen as a way to provide more to both the trust fund and beneficiaries’ future checks.”

Drew Powers, the founder of Illinois-based Powers Financial Group, told Newsweek: “On its face, this seems like a good idea—the possibility of generating greater returns that one can enjoy in retirement. But in reality, it won’t work for Main Street…This could make sense at some level if there were excess funds to invest above and beyond the government-backed funds, but Social Security is already broke. There are no extra funds to invest. How would the system handle downturns in the market? Taking money out of a portfolio in a down market begins the death spiral of savings.”

Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: “Fink’s proposal sounds reasonable because it’s framed as “growth” & “opportunity.” But it’s really asking retirees to give up guaranteed income for market-dependent returns. For some people, that’s a great trade. . For millions of retirees living on $1,500-$2,000 a month, it’s terrifying.”

What Happens Next

Fink’s comments add to ongoing debates about the future of Social Security as policymakers grapple with long‑term funding concerns. Currently, Social Security’s trust fund is set to run out of money for full benefits by the early 2030s unless Congress takes action.

Still, Beene cautioned that there are significant concerns over ideas like Fink’s.

“Tying a portion of Social Security benefits to market performance could hurt beneficiaries in an economic downturn,” Beene said. “And, as with most investment products, there are fees associated with linking money to mutual and index funds. It’s easy to see why some beneficiaries would be concerned over the risk involved.”