America's retirement age of 65 is "crazy," BlackRock CEO says

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Committee proposes raising Social Security status property

Committee proposes raising Social Security status age 02:33

With Americans surviving longer and spending much years successful retirement, nan nation's changing demographics are "putting nan U.S. status strategy nether immense strain," according to BlackRock CEO Larry Fink successful his annual shareholder letter. 

One measurement to hole it, he suggests, is for Americans to activity longer earlier they caput into retirement.

"No 1 should person to activity longer than they want to. But I do deliberation it's a spot crazy that our anchor thought for nan correct status property — 65 years aged — originates from nan clip of nan Ottoman Empire," Fink wrote successful his 2024 letter, which mostly focuses connected nan status situation facing nan U.S. and different nations arsenic their populations age. 

Fink's suggestions astir addressing nan nation's status situation travel amid a statement astir nan early of Social Security, which will look a funding shortfall in little than a decade. Some Republican lawmakers person projected raising nan status age for claiming Social Security benefits, arguing, for illustration Fink, that because Americans are surviving longer, they should activity longer, too. 

How to maximize status savings by minimizing taxes 03:38

But that ignores nan reality of aging successful nan workplace, pinch nan AARP uncovering successful a 2022 survey that nan mostly of workers complete 50 opportunity they look ageism astatine work. And because of sick wellness aliases an unexpected occupation loss, galore older Americans extremity moving earlier they planned to. In fact, nan median property of retirement successful nan U.S. is 62 — moreover little than nan "traditional" status property of 65. 

Fink is correct successful saying that nan status strategy isn't moving for astir households, noted status master and New School of Research professor Teresa Ghilarducci told CBS MoneyWatch. But his appraisal that group should activity longer misses nan mark, she added.

"After a 40-year-old research of a voluntary, do-it-yourself-based pension system, half of workers person nary easy measurement to prevention for retirement," she said. "And successful rich | nations, why isn't property 65 a bully target for astir workers to extremity moving for personification else?"

She added, "Working longer won't get america retired of this. Most group don't discontinue erstwhile they want to, anyway."

Vested interest?

To beryllium sure, America's status gap, aliases nan gulf betwixt what group request to money their aureate years versus what they've really saved, isn't new, nor is Social Security's looming backing emergency. Yet Fink's comments are noteworthy because of his position arsenic nan caput of the world's largest plus manager, pinch much than $10 trillion successful assets, including galore status accounts. 

Of course, Fink has a vested liking successful Americans boosting their status assets, fixed that his patient collects fees from those accounts. And successful his letter, he besides promotes a caller target-date money from BlackRock called LifePath Paycheck, which will rotation retired successful April. 

"He's steering nan speech toward BlackRock — and a batch of group who talk astir Social Security betterment connected Wall Street want to privatize it successful immoderate mode and make money," Boston University economist Laurence Kotlikoff, an expert connected Social Security, told CBS MoneyWatch. 

To beryllium sure, Fink besides praises nationalist argumentation occurrence stories for addressing status savings, specified arsenic Australia's system, which began successful nan early 1990s and requires employers to put a information of a worker's income into a fund. Today, Australia has nan world's 54th largest organization but nan 4th largest status system, he noted.

"As a nation, we should do everything we tin to make status investing much automatic for workers," he noted.

Expert connected why much Americans are withdrawing from their 401(k) status costs early 02:24

Can boomers hole nan problem?

Fink, who was calved successful 1952, said that his procreation has an responsibility to thief hole nan nation's status problems. The financial insecurity facing younger Americans, specified arsenic millennials and Gen Z, are creating generations of disillusioned, anxious workers, he noted. 

"They judge my procreation — nan babe boomers — person focused connected their ain financial well-being to nan detriment of who comes next. And successful nan lawsuit of retirement, they're right," Fink wrote. 

He added, "And earlier my procreation afloat disappears from positions of firm and governmental leadership, we person an responsibility to alteration that."

Boomer (and older) lawmakers and politicians often don't spot eye-to-eye connected really to hole nan status crisis. But failing to hole nan rumor damages not only nan retirements of individual Americans, but nan country's corporate belief successful nan early of nan U.S., Fink noted. 

"We consequence becoming a state wherever group support their money nether nan mattress and their dreams bottled up successful their bedroom," he noted.

  • Social Security

Aimee Picchi

Aimee Picchi is nan subordinate managing editor for CBS MoneyWatch, wherever she covers business and individual finance. She antecedently worked astatine Bloomberg News and has written for nationalist news outlets including USA Today and Consumer Reports.