Can the Stock Market Save Social Security?
Borrow $1.5 trillion, invest it in stocks, let returns fix the shortfall — the idea keeps resurfacing because it promises no visible pain. Independent analyses of the leading proposal found it fully repays its borrowing in at most 36% of simulations. Here's the full picture, explained neutrally.
Not on its own — and possibly not at all, according to the independent analyses of the leading proposal. With Social Security's retirement trust fund projected to run short around 2032, one recurring idea is to put the stock market to work: borrow money, invest it, and let market returns close the gap. It sounds appealing because it seems to spare everyone — no new taxes, no benefit changes. Here's what the leading version of the idea would actually involve, and why researchers across the political spectrum are skeptical.
The plan on the table
The most developed version is the bipartisan proposal from Sens. Bill Cassidy (R-LA) and Tim Kaine (D-VA) — one of the two big proposals we've covered. As analyzed by the Peter G. Peterson Foundation, it would:
- Borrow $1.5 trillion up front and invest it in stocks, leaving principal and gains untouched for 75 years
- Keep borrowing annually in the meantime to pay scheduled benefits — an estimated $25.1 trillion over 75 years
- Ultimately owe about $26.6 trillion in total borrowing, to be repaid by the invested fund's growth
The bet: over 75 years, stock returns outrun the government's borrowing costs by enough to pay everything back and fix the shortfall.
What the independent analysis found
The Center for Retirement Research at Boston College stress-tested that bet across 10,000 market simulations in three scenarios:
| Scenario | Odds the borrowing is fully repaid |
|---|---|
| Historical stock returns (~6.5%), borrowing doesn't move interest rates | 36% |
| More conservative returns (~4%) | 17% |
| Accounting for how $26.6T of borrowing affects GDP and interest rates | 0% — never repays in any outcome |
Economists across institutions raised the same core objections. MIT's Deborah Lucas: shifting to "risky assets does not improve the government's fiscal position, and it could make it worse." AEI's Andrew Biggs: waiting 75 years to find out means "the government is giving up decades of opportunities" to fix the system directly. Brookings' Gopi Shah Goda: the plan "does not tackle the structural imbalances in the program."
When stock investing could help
The research isn't anti-stock-market — it's anti-shortcut. CRR's own analysis finds that if Congress first closed the funding gap with some mix of revenue and benefit changes, then investing a portion of the trust fund (around 40% in equities) could genuinely reduce the size of future tax increases or benefit trims. In other words, equities can make a real fix cheaper — they can't replace one. And timing matters: analysts note that waiting until the trust fund is nearly empty (2032–2034) makes diversification too late to be a lasting fix on its own.
Where this fits in the debate
Every path to solvency ultimately comes from a short menu: more revenue (like lifting the payroll-tax cap), trimmed spending (like capping the largest checks) or expanded benefits paid for with new taxes, and — the option analyzed here — investment returns. The stock-market route keeps resurfacing because it's the only one that promises no visible pain; the analyses above explain why that promise is doubted. Meanwhile, Congress remains stuck on the process for even voting on a fix.
What it means for you
Nothing changes today — this is a proposal, not law, and your benefits aren't invested in the stock market now (the trust funds hold special-issue Treasury securities by law). The practical takeaway from the research: a real fix will involve visible trade-offs, and the sooner it happens, the smaller those trade-offs get. See your own numbers at different claiming ages with our free benefits calculator.
This article is general educational information, not financial advice. Proposal figures and expert assessments are from the Peter G. Peterson Foundation's analysis "Can Investing in the Stock Market Save Social Security?" and the Center for Retirement Research at Boston College; trust-fund projections from the 2026 Trustees Report. SocialSecurityNews.com is independent and not affiliated with the SSA or any foundation, lawmaker, or advocacy organization.
Frequently asked questions
- Can investing in the stock market fix Social Security?
- Not by itself, according to independent analyses. The Center for Retirement Research stress-tested the leading borrow-and-invest proposal across 10,000 market simulations and found the borrowing is fully repaid in only 36% of outcomes under historical returns, 17% under conservative returns, and never once the effect of the borrowing itself on interest rates is included.
- What is the Cassidy–Kaine investment fund proposal?
- A bipartisan plan to borrow $1.5 trillion, invest it in stocks untouched for 75 years, and keep borrowing (an estimated $25.1 trillion more) to pay benefits in the meantime — about $26.6 trillion in total borrowing, to be repaid from the fund’s market growth.
- Is Social Security invested in the stock market today?
- No. By law, the Social Security trust funds hold special-issue U.S. Treasury securities, not stocks. Proposals to add stock investments would require Congress to change the law.
- Could stocks ever play a role in fixing Social Security?
- Possibly as a complement. Research from the Center for Retirement Research finds that if Congress first closed the funding gap with revenue or benefit changes, investing around 40% of the trust fund in equities could reduce how large those changes need to be. Equities can make a fix cheaper — not replace one.
- Does any of this change my benefits now?
- No. This is analysis of a proposal, not a change in law. Benefits continue under current rules, with the projected 2032 trust-fund shortfall still the key date to watch.
Reference: SocialSecurityNews