Pension savings will run out because people are living longer, Larry Fink has warned
BlackRock CEO Larry Fink during the New York Times DealBook Summit, November 30, 2022 in New York City © AFP / Michael M. Santiago
Larry Fink, the head of BlackRock, the world’s largest asset management firm, has warned that demographics will inevitably strain pension systems and that longer lives are projected to force workers to retire later.
In his annual letter to chief executives and investors released on Tuesday, the billionaire investor called on governments to take urgent steps to tackle the “retirement crisis” by helping people save more for when they get old. Fink expressed concern that not enough is being done to ensure people have enough money to safeguard their retirement.
“No one should have to work longer than they want to,” he said. “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.”
“What should the average retirement age be?” Fink wondered, emphasizing that nowadays people are regularly living past 90.
The founder of BlackRock also urged corporate leaders and lawmakers to “start having the conversation” about the issue as changing demographics around the world lead to rapidly aging populations, while retirement benefits are decreasing. Fink cited the Netherlands as a good example of rethinking retirement policies.
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The Dutch government started to gradually raise the retirement age more than ten years ago to keep state pension affordable, he said, adding that it automatically adjusts as the country’s life expectancy changes.
The aging of the global population means an increase in the proportion of older people – a trend that has been tracked nearly everywhere in the world. According to a UN outlook on global life expectancy, one in six people will be over 65 years old by 2050, up from one in 11 in 2019.
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