Warren Buffett, Charlie Munger were once asked if Social Security is a ‘government-sponsored Ponzi scheme’. Here’s how they responded — plus how to ensure your retirement is secure
Moneywise, 4/12/25
Social Security has long been a subject of intense discussion in America, but investing legend Warren Buffett’s position on the issue is unmistakably clear.
During Buffett’s company, Berkshire Hathaway’s, annual shareholders meeting in 2005, an audience member posed a blunt question: “I’m asking for your opinion on Social Security. Shall we call it the government-sponsored Ponzi scheme for retirees?”
Buffett clarified that Social Security is essentially a “transfer payment by the people who are in their productive years to the people who are past their productive years.” And he liked that mechanism, stating, “I think that the obligation for the people who do well in this society is to provide a reasonable level of sustenance for those beyond their productive years.”
Buffett’s right-hand man, the late Charlie Munger, strongly defended the program. He said that he felt more strongly than Buffett that the Republicans who were challenging Social Security were “out of their minds.”
His remarks were met with laughter and applause from the audience.
That said, the audience member’s concern is not unfounded.
‘The biggest Ponzi scheme on Earth’
Nobel Prize-winning economist Milton Friedman once called Social Security “the biggest Ponzi scheme on earth.”
Concerns over the sustainability of the program have heightened more recently, with the Congressional Budget Office projecting the exhaustion of the Social Security Old-Age and Survivors Insurance Trust Fund by the fiscal year 2032.
Instead of solely relying on Social Security for your retirement, you can also take matters into your own hands. Proactively investing and saving on your own can provide stability amid Social Security’s uncertain future.