Ken Fisher Discusses the Future of Social Security and What It Means for Markets

Concerns over Social Security’s demise have circulated for decades. According to Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher, Social Security funding issues may be addressed, in some form, over time. Fortunately for investors, Ken says Social Security funding issues are unlikely to impact stock markets in the foreseeable future. Ken believes financial markets actively price events that are likely to occur in the next 3 to 30 months. Probable events within 3 months are likely already priced into the market, while events more than 30 months out have too little visibility for markets to consider.

Social security functions on a “pay as you go” basis, meaning taxes taken from current workers are immediately redistributed to current beneficiaries, rather than being invested and earning a rate of return like a retirement plan. Some concerns over Social Security center on the idea that younger generations will no longer pay into the program because they may not receive benefits in the future, leaving current retirees without a key source of retirement income. Historically, Congress has changed the rules on Social Security to improve its funding status. Ken Fisher believes Congress is likely to intervene again to address potential funding shortfalls down the line.

Regardless of what happens to Social Security, Ken says it’s important for investors to recognize potential events far into the future rarely impact stock prices.

For more of Ken Fisher’s thoughts on the markets or retirement, visit us at https://www.fisherinvestments.com/en-us.

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Investing in securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. Nothing herein is intended to be a recommendation. The opinions expressed are subject to change without notice.

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