Billionaire Investment Expert Suggests 3 Practical Ways To Save Social Security and Avoid ‘Retirement Crisis’
You can add another name to the growing choir of Americans who think the country is dealing with a retirement crisis — billionaire investor and BlackRock CEO Larry Fink. Fink used that term this week in his annual letter to BlackRock investors and also urged more people to take action to prevent the crisis from getting any worse.
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In the letter, Fink warned of a looming U.S. “retirement crisis” and called on baby boomers to help younger generations build more savings, Bloomberg reported.
“It’s no wonder younger generations, millennials and Gen Z, are so economically anxious,” Fink wrote in the letter to BlackRock investors on March 26. “They believe my generation — the baby boomers — have focused on their own financial well-being to the detriment of who comes next. And in the case of retirement, they’re right.”
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Americans Believe Retirement Crisis Is Already Here
Fink is not alone in feeling anxious about the state of retirement in the U.S. As previously reported by GOBankingRates, a December survey conducted by Clever Real Estate found that about two-thirds (66%) of retired Americans believe the U.S. is in a retirement crisis due to a combination of rising costs, inadequate savings, outstanding debt, threats to Social Security and other worries.
One major concern is the looming depletion of Social Security’s Old Age and Survivors Insurance Trust Fund, which is expected to run out of money in about a decade. That will leave the program solely dependent on payroll taxes — and those currently fund only about 77% of benefits.
Here are three ways Fink says the country can fix Social Security and bolster retirement savings.
More and Better Workplace Benefits
As CNBC reported, Fink supports proposed legislation that would require employers with 401(k) plans to automatically enroll new workers. He would also like to see more companies provide financial education to workers and make it easier to transfer 401(k) savings when workers change jobs. In addition, Fink supports providing more investment options such as target date funds, Business Insider reported.
“As a nation, we should do everything we can to make retirement investment more automatic for workers,” Fink wrote in the letter.
Rethink the Retirement Age
American workers can retire whenever they want and access Social Security retirement benefits as early as age 62. Even so, many workers still look as 65 as the right retirement age — and most will receive their full Social Security benefits at 67. Fink suggests rethinking these milestones by raising the full retirement age for benefits, or by finding ways to encourage Americans to work later in life.
“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.”
Broaden Benefits to More Workers
Part-time and gig workers have become a bigger part of the U.S. economy, yet only about 20 states have established retirement systems that include these workers, CNBC reported. Fink would like to see more states act as “laboratories of retirement” by broadening benefits to more non-full-time employees.
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This article originally appeared on GOBankingRates.com: Billionaire Investment Expert Suggests 3 Practical Ways To Save Social Security and Avoid ‘Retirement Crisis’
