BlackRock CEO Larry Fink Calls Retirement Age of 65 ‘Crazy’ — 4 Reasons He’s Wrong

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BlackRock CEO Larry Fink made headlines this week when he warned of a looming retirement crisis in the U.S. and suggested that the Social Security system and employer-based retirement programs should both be overhauled. In a letter to BlackRock investors, Fink said it’s “crazy” that 65 is considered the normal retirement age when so many Americans are behind on their retirement savings.

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Although Americans can file for Social Security retirement benefits as early as age 62, many still look at 65 as a good age to retire. Others wait until full retirement age (currently 66 or 67, depending on your birth year), which is when you get all the benefits you are entitled to. But Fink hinted that it might be time to raise the Social Security full retirement age. He also supports ways to encourage people to delay retirement.

“No one should have to work longer than they want to,” Fink wrote. “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.”

Not everyone agrees with Fink’s position, however. Here are four reasons he might be wrong about raising the retirement age

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Many Seniors Would See Lower Benefits

In a paper released last year, the nonprofit National Committee to Preserve Social Security and Medicare said that raising the full retirement age to 70 — as some have proposed — would “significantly cuts benefits for anyone retiring before their new full retirement age.” For example, if the FRA were changed to age 70, then a worker claiming retirement benefits at age 62 would have their benefits reduced by nearly half, according to the NCPSSM.

It Would Especially Hurt Those Who Need Social Security the Most

In a 2023 report, the Center on Budget and Policy Priorities noted, “Due to discrimination in the labor market and other structural inequities, Black and Latino workers are less likely than white workers to have access to private retirement plan coverage.” This means they depend more heavily on Social Security in retirement. Benefit cuts related to a higher retirement age would have a particularly negative impact.

Many Older Workers Face Ageism

One of Fink’s recommendations is to encourage people to work longer, likely into their late 60s or beyond. But as CBS News reported, a 2022 survey from the AARP found that most workers over 50 say they face ageism at work, which means they might face job cuts before younger employees. In addition, many older workers are forced to retire due to health and other issues — which is one reason the median retirement age right now is 62.

Most Americans Don’t Have Enough Retirement Savings

A 2023 survey from GOBankingRates found that the majority of Americans have less than $50,000 saved for retirement. More than one-third (36%) have less than $10,000 saved — including 31% of those 65 and older. These savings totals will not get you comfortably through retirement, which is why so many seniors depend heavily on Social Security.

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This article originally appeared on GOBankingRates.com: BlackRock CEO Larry Fink Calls Retirement Age of 65 ‘Crazy’ — 4 Reasons He’s Wrong