In his annual letter to company investors, BlackRock CEO Larry Fink urged politicians and corporate leaders to come together to address the retirement crisis.
Fink, 71, highlighted the economic anxiousness of Millennials and Gen Z when it comes to retirement and stated that they are right to believe that his generation, the Baby Boomers, “have focused on their own financial well-being to the detriment of who comes next.”
“As a society, we focus a tremendous amount of energy on helping people live longer lives,” he wrote. “But not even a fraction of that effort is spent helping people afford those extra years.”
Larry Fink, chairman and chief executive officer of BlackRock Inc. Photographer: Victor J. Blue/Bloomberg via Getty Images
In the letter, he points to a March 2023 report from the Social Security Administration that shows by 2034, the system will not be able to pay people full benefits.
Fink writes that the current message the workforce receives from the government and corporations is, “You’re on your own.”
“Before my generation fully disappears from positions of corporate and political leadership, we have an obligation to change that,” Fink wrote.
The letter also suggests reevaluating the standard retirement age.
“No one should have to work longer than they want to,” Fink wrote. “But I do think it’s a bit crazy that our anchor idea for the right retirement age — 65 years old — originates from the time of the Ottoman Empire.”
Instead of moving back when people receive retirement benefits, Fink suggests having conversations about how to encourage people to work past 65 years old and how to treat that demographic differently, as people with a lot to offer instead of ready for retirement.
Recent data from the Employee Benefit Research Institute (EBRI) shows that the median age for retirees is 62 and the mean is 65 years of age, even though workers are more likely to say that they expect to retire at 70 or older.
Almost half of retirees who left the workforce earlier than they wanted to retire said they did so because of health problems, disabilities, or shifts at their company.
Only 35% of people who retired earlier than planned did so because they were financially ready for retirement.
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Fink also stated that BlackRock would announce partnerships and initiatives over the next few months to ask policymakers, investors, retirees, and other interested parties about how the average retirement age should change.
Other solutions Fink proposed were making investing automatic and helping retirees spend what they had saved more confidently.
NYC-headquartered BlackRock is the world’s largest asset manager, with $10 trillion in assets under management as of January. It grew from startup to industry leader status in less than 40 years and, according to Fink’s letter, more than half of the assets it manages are for retirement.