In a world where retirement feels increasingly like a mirage on the horizon, Larry Fink, CEO of BlackRock, calls for a hard reset on how we think about retirement.
His message? It’s time to rethink the traditional retirement age of 65 – a concept he labels “crazy” given its ancient origins and the challenges facing Social Security and retirement savings in America.
The 65-Year Retirement Age: An Outdated Relic
“No one should have to work longer than they want to,” Fink wrote in a recent letter. “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.”
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This blunt critique points to a simple truth: the retirement age, established in the early 20th century, no longer fits modern realities. Back then, life expectancy was much shorter – many workers didn’t even live long enough to see their retirement benefits.
Fast forward to today and the script has flipped. Americans are living longer, which Fink calls “a wonderful thing,” but this longevity is straining a retirement system that wasn’t designed for decades-long retirements.
The Retirement Crisis and Social Security’s Uncertain Future
A key piece of the puzzle is the looming Social Security funding shortfall. According to Fink, the program’s Old Age and Survivors Insurance Trust Fund is expected to run out of money within the next decade. Once that happens, Social Security will rely solely on payroll taxes, which only cover about 79% of promised benefits, according to the National Association of Plan Advisors.
Baby boomers contributed to Social Security for decades, helping build up a surplus. But now, as millions of them retire, those reserves are dwindling. Meanwhile, millennials and Gen Z are left staring at an increasingly shaky safety net.
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Fink pulls no punches in his assessment of the baby boomer generation’s role in this crisis: “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.”
Working Longer as a Solution
Fink isn’t alone in suggesting that working longer could solve the retirement crisis. Republican lawmakers and even former presidential candidate Nikki Haley have floated similar ideas. Fink argues that working beyond 65 could help individuals save more, grow their Social Security benefits and ease the strain on the system.
