Rely On Social Security Alone And ‘You’re Going To Be Living In Poverty’
February 12, 2025
1 3 minutes read
Blackrock CEO Larry Fink Gave His ‘Diagnosis’ Of Retirement Crisis: Rely On Social Security Alone And ‘You’re Going To Be Living In Poverty’
BlackRock CEO Larry Fink isn’t sugarcoating the problem: retirement in America is broken.
In a March 2024 interview with Bloomberg, David Westin got straight to the point, asking Fink for his take on the crisis: “Give us your diagnosis of that problem.”
Fink clarified that millions of Americans aren’t financially prepared for their later years. “We have still 57 million Americans who don’t have any savings or any retirement plan,” he stated. And if those people think Social Security alone will carry them through, Fink had a blunt reality check: “If that’s all you have when you retire, you’re going to be living in poverty, below the poverty line.”
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Fink’s wake-up call wasn’t just theoretical. In his 2024 annual letter to shareholders, he reflected on his experience handling his parents’ finances after his mother passed away. He was surprised at how much they had saved despite their modest income, a stark contrast to the dire state many retirees find themselves in today.
According to Fink, the crux of the issue is that the entire retirement system is outdated. “Most Americans retired between 60 and 62 then, but most Americans passed away at 67,” he explained. “Today, statistically, a couple 60 years old in good health – one of them is going to live over 90.” With people living decades longer, retirement savings must stretch further, yet most aren’t prepared.
Advances in medicine compound this longevity crisis. “The miracles of technology … are extending life,” Fink said, referencing breakthroughs in treatments for heart disease, kidney disease and even dementia. But while medicine is evolving, financial planning isn’t keeping up. “There is not a dialogue in America … about can we afford that longevity?”
Fink believes fixing retirement requires two things: conversation and action. “We solve problems through conversation,” he said. But when it comes to retirement, “we have no conversation.” He stressed the need for a global – and national – dialogue to reevaluate retirement age, savings strategies and investment approaches.
One potential fix? Using capital markets to boost retirement savings. Fink pointed to Japan, where a recent policy change doubled the amount of tax-deductible retirement contributions. The result? A 30% surge in the Japanese stock market, driven by long-term investment. “Not only does it give financial returns for those who are retiring and saving for retirement, but it’s a big foundation for domestic companies,” he explained.
With Social Security on shaky ground, Fink suggested a controversial idea: investing the Social Security trust fund in long-term assets. “Right now in Congress, a number of senators and congressmen are talking about rehabilitating our Social Security pool and maybe contributing a big block of money into it,” he noted. The U.S. system, he said, is a “pay-as-you-go” model, unlike countries such as Australia, where retirement funds are structured differently to ensure sustainability.
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As a baby boomer himself, Fink acknowledged that his generation has benefited from economic prosperity, but he questioned whether they’ve done enough to secure a stable future for younger generations. “We were born at a great economic moment,” he said. “We all have a responsibility to try to recreate that environment for our grandchildren.”
His message was clear: Americans need to save more, invest smarter and rethink their approach to retirement. Because as Fink put it, “We need to have a conversation.”
That conversation shouldn’t just be national – it should also be personal. With people living longer and the retirement landscape shifting, now is the time to consult a financial advisor to ensure you’re on track. Whether adjusting your investment strategy, maximizing your savings or finding ways to generate income in retirement, getting professional guidance can help you retire on your terms – without relying solely on Social Security.
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