In a new Issue Brief, researchers at the Center for Retirement Research examined the idea of investing some of the Social Security trust fund’s assets in equities to maintain the long-term solvency of the program.
“The real world provides a convincing case that governments can invest in equities in a sensible manner,” says the Issue Brief. “Canada has a large actively managed fund, follows fiduciary standards, and uses conservative return assumptions. In the United States, the Railroad Retirement system has also invested in a broad array of assets without interfering in the private market, as has the Federal Thrift Savings Plan, where the government plays an essentially passive role.”
Researchers were also quick to point out that Social Security no longer has a sizable trust fund to invest. And rebuilding the trust fund through additional taxes or borrowing may not be either wise or feasible. To learn more, read the full Issue Brief.