Brief Nix Social Security Use of Stocks
Rudolph G. Penner
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[Newsday] Historically, Social Security trust funds have invested only in government bonds. President Bill Clinton would like them also to invest in corporate stocks. The stocks are expected to yield a higher return than bonds, thus postponing the date at which the trust fund is exhausted by the retirement of the baby boomers. He says the trust funds would own about 4 percent of the stock market within 15 years. It is a bad idea. The potential gain is not very great, and the risk is high that Congress would use the equity investments of the trust funds for political purposes.
Research Areas Aging and retirement
Tags Social Security Pensions