![]()
By Emma W. Thorne, Editor at LinkedIn News
Updated 1 hour ago
There’s a global retirement crisis on the way, says BlackRock CEO Larry Fink, in his annual shareholder letter. Fink warns that an aging population is putting pressure on Social Security and other social safety nets — and that the problem will only get worse as people live longer. He argues that Americans must invest more of their assets in capital markets to ensure a stress-free retirement. “No other force can lift more people from poverty or improve quality of life quite like capitalism,” writes Fink.
- The number of U.S. retirees hit a post-pandemic record in December, with about 2.7 million more than predicted by a Federal Reserve Bank of St. Louis model.
- The U.S. Labor Department is pushing new rules for the investment advisers who handle retirement funds.
We don’t have ‘a’ retirement system in this country…we have three hundred something million retirement systems and plans and hopes and dreams. But hope is not a plan and that, along with the demographic reality of living longer, is staring us all right in the face. We have to look at and accept the reality in order to do something about it.
Larry Fink is not without interests here, calling for more saving and investing for longer lives. He runs a little shop called BlackRock (not to be confused with Blackstone) that just happens to be a top asset manager in the space. But sometimes…interests align.
And as long as his firm and others are working on new offerings, educating the broader public, and calling for more action in this area, it works for me. They’re not trying to hide anything.
Are we going to turn into Australia, where employers are mandated to do a lot more than they are here? (Google Superannuation) No, not by a long shot, and not for some time. But all stakeholders need to get together, understand what’s needed, how much has changed (around work, around life, around everything).
We’re not going back to pensions and defined benefits. We each have to define how we do this by ourselves, alone with 300 million plus others. Things have to change and if Uncle Larry is leading, it’s better than nothing, and much better than having the government tell us what we are going to get…that never ends well.
What do you think needs to change? How do you see it playing out, for you, your family, and society wide?
![BlackRock's Larry Fink takes on retirement crisis in annual investor letter]()
BlackRock’s Larry Fink takes on retirement crisis in annual investor letter
axios.com
BlackRock chief executive Larry Fink is worried that government and businesses haven’t thought through the financial implications of medical breakthroughs such as weight loss drugs and dementia drugs. The US in particular is no position to make sure its citizens will be financially comfortable as they live longer. This “retirement crisis” must be addressed, he wrote Tuesday in his annual letter to corporate leaders and investors.
“We focus a tremendous amount of energy on helping people live longer lives. But not even a fraction of that effort is spent helping people afford those extra years,” it said.
Previously, Fink has used his perch atop the world’s largest money manager to push climate change and stakeholder capitalism to the top of the global agenda. This time, he wants to convene a discussion on how to fund retirement and get people to stay in work longer. Read about it here:
![Larry Fink warns retirement crisis looms for ageing world population]()
Larry Fink warns retirement crisis looms for ageing world population
ft.com
The retirement crisis is real. As the industry, we must provide solutions and services to help Americans save and pay down student debt more effectively. Sitting on the sidelines, making it someone else’s problem to fix burdens everyone with the challenges. Let’s leave the next generations with a better financial future than how we left the baby boomers. Thank you Juliana Kaplan for shining the spotlight on the issue.
![Meet the Americans who can't retire]()
Meet the Americans who can’t retire
businessinsider.com
DON’T THINK #socialsecurity will be there when you #retire? You’re not alone. In 2020, 26% of Americans were concerned about the future of #SocialSecurity because they think the program is running out of money. If the trust fund runs dry, payroll tax revenue will keep coming, so Social Security won’t be broke. But #payrolltaxes provide enough to pay only about 76% of promised benefits. Without the trust fund as a backup, retirees could be looking at a 24% benefit cut. You don’t need to concern yourself with the thought Social Security will go bankrupt and you’ll get nothing, as that can’t happen unless a major change to the law occurs and the program loses payroll taxes as a dedicated funding source. #socialsecuritybenefits
Unique perspectives from professionals around the world
Read and share thoughts with a community that collaborates and helps each other
Join the community
This morning, I published my annual letter to investors. It’s the result of months of thinking about a few big, macroeconomic issues – but one big one in particular: retirement.
Despite all the world’s challenges, it seems to me we’re living through a remarkable moment for human health. The average life expectancy has increased more in my lifetime than in all previous recorded history, and researchers continue to invent a rush of new life-extending drugs, from Ozempic to breakthrough Alzheimer’s pharmaceuticals.
Beneath this progress, though, is a frustrating irony: While science has gotten remarkably good at extending people’s lives, our economic and political systems haven’t done nearly enough to help people afford them. In the United States, 4-in-10 Americans don’t have a spare $400 for an emergency like repairing their car – let alone to invest in retirement.
At the same time, younger generations – Millennials and Gen Z – are experiencing a really profound amount of anxiety about their economic futures. As I was finishing the letter, The Wall Street Journal published an article, showing that four-in-ten American high school seniors say it’s “hard to find hope for the world.” Many young people believe that my generation – the Baby Boomers – have focused on their own financial well-being to the detriment of who comes next. And I think they have a point.
Obviously, young people have to figure out how to afford a number of things – homes, kids, student loans – before they face the prospect of retirement. But the nature of investing for retirement is such that if you don’t start in your 20s or 30s, it’s almost impossible to catch up by the time your 65.
That’s why I titled this year’s letter, “Time to Rethink Retirement.”
Rethink it how? Retirement is BlackRock’s core business. We don’t have all the public policy answers, but we can contribute some data and insights about where to find them. The location is often the capital markets.
For countless people, the ability to invest has been the difference between an anxious retirement and a comfortable one, including for my parents. My dad owned a shoe store. My mom taught English. They died in their 80s but could’ve lived beyond 100 and still afforded it because of their investments.
One message I want to get across in this letter is: The same markets that helped them in their time can help us in ours – and not just for retirement. The power of capital markets can be unleashed to help us afford infrastructure at a time when nations are facing historically high debt burdens but need to make huge investments in roads, airports, and power generation.
I hope you find the letter interesting, and, as always, I appreciate the feedback. https://1blk.co/3PBM7ry
