{"id":50488,"date":"2026-05-19T22:20:20","date_gmt":"2026-05-19T19:20:20","guid":{"rendered":"https:\/\/mk.gen.tr\/study-bipartisan-social-security-plan-to-borrow-and-invest-unlikely-to-pay-off\/"},"modified":"2026-05-19T22:20:20","modified_gmt":"2026-05-19T19:20:20","slug":"study-bipartisan-social-security-plan-to-borrow-and-invest-unlikely-to-pay-off","status":"publish","type":"post","link":"https:\/\/mk.gen.tr\/tr\/study-bipartisan-social-security-plan-to-borrow-and-invest-unlikely-to-pay-off\/","title":{"rendered":"Study: Bipartisan Social Security plan to borrow and invest unlikely to pay off"},"content":{"rendered":"

A high-profile proposal to borrow $1.5 trillion and invest the money in stocks to salvage Social Security\u2019s finances would likely leave taxpayers saddled with enormous debt, even under optimistic market conditions, according to a new analysis from the Center for Retirement Research at Boston College<\/a><\/strong>.<\/p>\n

The brief is critical of a plan championed by Sens. Bill Cassidy (R-La.) and Tim Kaine (D-Va.), who have sought middle ground between raising taxes and cutting benefits.<\/p>\n

The Social Security trust fund is projected to run dry by 2034<\/a>, after which incoming payroll taxes can cover only about 80% of scheduled benefits.<\/p>\n

Cassidy\u2019s and Kaine\u2019s proposal would borrow a total of $26.6 trillion over 75 years, while $1.5 trillion would seed a separate investment fund placed into equities and other risky assets.<\/p>\n

The rest would cover annual benefit gaps. After 75 years, investment proceeds would repay the Department of the Treasury<\/strong>, with leftover gains helping to offset the total tab borrowed, according to the plan.<\/p>\n

But a simulation of 10,000 possible market scenarios, detailed in the brief<\/a>, found that even assuming a robust 6.5% real annual return on stocks \u2014 matching historic highs \u2014 the investment fund would fully cover the amount borrowed roughly 64% of the time.<\/p>\n

Under a more modest 4% real return forecast by many financial firms, the fund would reportedly offset just 19% of the $26.6 trillion at the median outcome.<\/p>\n

Room for reverse?<\/h2>\n

A potential shortfall in Social Security benefits could also drive older homeowners toward reverse mortgages<\/a>.<\/p>\n

If trust fund insolvency forces across-the-board benefit cuts, and if annual cost-of-living adjustments<\/a> continue to lag real inflation experienced by seniors \u2014 particularly for health care and housing \u2014 millions may find their monthly income falling well short of basic expenses.<\/p>\n

Reverse mortgages could become an essential lifeline. Demand for these loans may accelerate sharply as retirees seek to replace lost or eroded Social Security income.<\/p>\n

Equity investment needs paired with other fixes<\/h2>\n

The researchers do not rule out a role for stocks.<\/p>\n

\u201cAlternatively, equity investments could help Social Security\u2019s finances if paired with a tax increase or benefit cut that restores solvency,\u201d the brief explained.<\/p>\n

In simulations where lawmakers immediately raise payroll taxes enough to close the 75-year shortfall \u2014 a 3.82% increase under current law \u2014 and then invest up to 40% of trust fund assets in equities, the outcome shifts dramatically.<\/p>\n

At the median projection with 6.5% real returns, the trust fund would hold assets equal to 10.1 times annual outlays in 75 years, compared with just 0.7 times if left entirely in special-issue Treasury bonds.<\/p>\n

Even with lower 4% returns, the ratio stabilizes around 4, enough to pay full benefits indefinitely without further cuts or tax hikes.<\/p>\n

\u201cBut the window of opportunity is closing; waiting until 2034 to introduce equities would be too late to offer a permanent fix,\u201d the brief warns.<\/p>\n

Under a delayed 2034 start \u2014 requiring a 4.53% tax increase \u2014 median trust fund ratios fall to 3.4 with 6.5% returns, and below sustainable levels with 4% returns. In the latter scenario, the fund would not remain solvent indefinitely even at the 50th percentile of outcomes.<\/p>\n

\u201cIf equity investment is to play any constructive role in Social Security reform, it must be considered early, alongside a comprehensive solvency package that restores balance between revenues and benefits and rebuilds reserves,\u201d the authors concluded.<\/p>\n

The analysis assumes equity allocations phased in over 15 years and capped at 40% of trust fund assets to limit market distortion \u2014 a level that would still leave the government owning less than 7% of the U.S. stock market today.<\/p>","protected":false},"excerpt":{"rendered":"

A high-profile proposal to borrow $1.5 trillion and invest the money in stocks to salvage Social Security\u2019s finances would likely leave taxpayers saddled with enormous debt, even under optimistic market conditions, according to a new analysis from the Center for Retirement Research at Boston College. The brief is critical of a plan championed by Sens….<\/p>","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/posts\/50488"}],"collection":[{"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/comments?post=50488"}],"version-history":[{"count":0,"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/posts\/50488\/revisions"}],"wp:attachment":[{"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/media?parent=50488"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/categories?post=50488"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/tags?post=50488"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}