- BlackRock CEO Larry Fink warned of a growing retirement crisis, emphasizing that only employees at top companies benefit from adequate retirement planning while many Americans feel unprepared. He urges corporate leaders and politicians to rethink the system, acknowledging younger generations’ economic anxiety and suggesting older generations should work longer to restore trust and financial security.
While short-term economic uncertainty is fairly high on the list of priorities for CEOs at the moment, BlackRock CEO Larry Fink also wants to keep the topic of retirement front and centre.
The investment management chief has often shared his thoughts on a coming retirement crisis, saying not enough is being done to generate wealth for younger generations when they hit retirement age.
This week Fink, who is worth $1.2 billion per Forbes, warned that it’s also only those who work for the biggest companies in the world who are truly benefitting from retirement planning.
“One of the fundamental problems in America is, retirement’s not that bad of a problem for the top Fortune 500 companies. We are providing enough support to our employees where they’re getting the adequacy of retirement,” Fink told CNN earlier this week.
“It’s beyond that, we refuse to talk about how do we get more broadening of our economy with more Americans participating in that. That’s why we have to have a conversation in Washington, this has to be considered a national priority and a national promise to all Americans.”
When countered that it’s easy for a billionaire to lecture the public on saving, Fink reportedly responded: “There was a time when I wasn’t one.”
Fink—whose organization handles $10 trillion in assets earmarked for retirement—is correct in his stance that many Americans don’t feel sufficiently prepared for the day they stop working.
A Fed report released last year found that, on average, only 34% of the public felt their savings were on track. This was up from a year prior as in 2022, when just 31% of Americans said their savings schedule was going to plan, but still down on the 40% reported in 2021 when COVID-related savings were at their peak.
The younger the respondents to the Fed survey were, the less confident they were in their ability to put aside adequate amounts of cash to stop working. The report—which surveyed more than 16,000 people—found those aged between 18 and 29 were the least confident with only 26% of respondents saying their savings were on track.
This rose to 34% for those aged between 30 and 44, and to 38% between the ages of 45 to 59. By the age category of 60+ this confidence rose to 45%—signaling the majority of the respondents as they closed in on retirement still didn’t feel confident about their finances.
It’s perhaps no surprise then that the Fed survey also found that 27% of adults in 2023 considered themselves to be retired, but were still working in some capacity. Of that, 4% were still in full-time work.
Generational tension
The lack of security younger generations are feeling when they think about their financial future is a dynamic Fink, aged 72, is keenly aware of.
In fact last year he called on his own generation to do more to support their younger peers, writing in a letter to BlackRock investors that corporate leaders and politicians to pursue “an organized, high-level effort” to rethink the retirement system.
“It’s no wonder younger generations, Millennials and Gen Z, are so economically anxious,” Fink wrote. “They believe my generation—the baby boomers—have focused on their own financial well-being to the detriment of who comes next. And in the case of retirement, they’re right.”
Fink questioned, for example, whether the retirement age should still be set at 65 and if his generation and those immediately below it should work for longer.
He said the burden to reestablish trust with younger people—who fear their social security benefits will be run dry by the time they reach retirement age—sits with older generations.
“Maybe investing for their long-term goals, including retirement, isn’t such a bad place to begin,” Fink added.
