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BlackRock CEO Larry Fink caused quite a stir when he suggested America could dodge its looming “retirement crisis” by encouraging people to continue working past age 65.
The billionaire, who chairs the world’s largest asset management firm, kicked off his 2024 annual letter to shareholders by telling his readers it is “time to rethink retirement.”
He raised the point that more Americans are retiring and their retirements are increasing by length. This, he claims, is having a “massive impact on the country’s retirement system” — specifically the nation’s Social Security coffers, which are quickly running out of money.
“What’s the solution here?” Fink pondered in his letter. “No one should have to work longer than they want to. 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.”
Labor economist Teresa Ghilarducci, a renowned thought leader on U.S. retirement issues, slapped down Fink’s suggestion in a recent interview with Bloomberg’s Sonali Basak.
Ghilarducci thinks people need to dive deeper into the data around American life expectancy and how that relates to working longevity.
“Not everyone is living longer,” she stressed. “There is a slice of the population that have had good healthcare [and] have had the kinds of jobs that enhance their health and their wellbeing and their skills. They’re living longer.
“But there are some parts of our economy, of our America, where actually the longevity is going down. Deaths of despair, the suicides, the opioid addiction [and] even the kinds of jobs that people have are shortening their lives.”
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One part of America’s so-called “retirement crisis” that Ghilarducci thinks experts — “including Larry Fink” — overlook is the fact that “most people cannot decide when they retire.”
According to a 2018 Schwartz Center for Economic Policy Analysis report, 52% of older workers claimed they were forced into involuntary retirement.
Ghilarducci cited this stat, saying that older Americans are often “forced to retire” because of health issues — like bad knees, metabolic disorders and stress — or to take care of their aging spouse.
“This idea that workers can just decide to work longer is a myth because most people cannot decide whether or not to work or not,” she stressed.
While you may not have much choice over your employment later in life, there are things you can control, such as: how you manage your finances, when you decide to take Social Security, and how you save and invest your money so that you have enough to live off during your retirement.
To tackle these choices, it’s important to first ensure your finances are in order. This begins with creating an emergency fund to ensure that unexpected expenses don’t cause you undue financial stress.
Read more: Rich, young Americans are ditching stocks — here are the alternative assets they’re banking on instead
While you may not have much choice over your employment later in life, there are things you can control, such as: how you manage your finances, when you decide to take Social Security, and how you save and invest your money so that you have enough to live off during your retirement.
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If you’re worried about potential impacts to the availability of Social Security on your retirement, ensure you’re doing everything you can to save for your future.
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