Skip to Content
Investing Specialists

What Role Does Social Security Play in Readers' Asset Allocation Decisions?

Many Morningstar readers think of Social Security as income, not as an asset.

This week is Morningstar.com's Retirement Matters Week, where each day we take a deep dive into portfolio planning issues that retirees face. One such challenge is determining what role Social Security will play in portfolio planning. There are different schools of thought on this topic. For one, Vanguard founder Jack Bogle has expressed the opinion that people ought to consider Social Security as an asset (akin to a fixed-income allocation), and failing to account for it can result in potentially underweighting their equity allocation. 

Others, meanwhile, take objection to the idea of computing a "present value lump sum" for Social Security's income stream, as Social Security is not a financial asset that can be bought, sold, or rebalanced. Therefore, they consider it separately from their investment assets, and do not include it in their asset allocation.

To view this article, become a Morningstar Basic member.

Register for Free