BlackRock CEO: “It’s Time to Rethink Retirement”

Perspectives on Larry Fink’s Annual Letter to Investors 

Earlier this year, Larry Fink, the co-founder, chairman, and chief executive officer of investment management giant BlackRock, Inc., published his annual letter to investors. Typically, each letter includes a look back at the firm’s performance across the preceding year, gives some commentary on key financial metrics both internal and market-wide, and provides other general updates on the business. 

His letters also examine important and meaningful external issues that at least partially inform BlackRock’s corporate strategy. In years past, Fink has opined on climate change, ways to create broader and easier access to investment instruments for more people, and other pressing questions. 

This year was no exception, with his letter bearing the title “Time to Rethink Retirement.”

Fink’s view is that we are not adequately preparing for extremely important demographic change that is, in fact, already with us. And it’s not just that we are not preparing for it, we are barely acknowledging it. The change in question is that people, for a variety of reasons, are now living much longer lives than before and so their needs, financial and otherwise, must be reconsidered.

In Fink’s words: “As a society, we focus a tremendous amount of energy on helping people live longer lives. But not even a fraction of that effort is spent helping people afford those extra years.”

The letter explores how we got to where we are today. Among other factors, the rapid decline of “defined benefit” programs (i.e. pensions) and the equally rapid rise of “defined contribution” plans (i.e. 401ks) has, in Fink’s view, created more uncertainty for older workers, not less.

And he sees this issue only growing more acute with time. “[A secure retirement] is a much harder proposition than it was 30 years ago. And it’ll be a much harder proposition 30 years from now. People are living longer lives.”

But the issue, and Fink acknowledges this, is much bigger than how one might go about stretching the dollars they have saved for retirement. While important, doing so will not actually solve the problem we need to confront, it will merely treat a symptom of it. There needs to be a complete change in how we see older people and their place in the employment/investment/retirement paradigm.

Fink then goes on to ask a critical question: “What if the government and the private sector treated 60-plus year-olds as late-career workers with much to offer, rather than people who should retire?”

This is the essential point: It is not just individuals that need to rethink retirement, companies need to completely revise their priorities in terms of how they hire and how they use the skills and capabilities of the older workers they currently employ. It is true that company’s today generally skew younger in terms of their hiring preferences.

But when businesses deprioritize their more experienced team members and, as so often happens, disregard entirely older job applicants, they are leaving a vast pool of skills and knowledge untapped. This goes beyond paying mere lip service to “valuing” or “respecting” the older demographic; they should be actively building internal and external programs that are designed to capture the immense value that older workers provide.

What would this look like? An obvious example is structured mentorship programs to teach leadership and team-building skills to first-time and less experienced managers. 

There are a number of employers who have an admirable record of employing older workers. Obvious examples are Home Depot, Walmart, and national grocery chain Wegmans. But there are other corporate and professional services companies that have similarly prioritized hiring more experienced workers, such as Franklin International, SafeStreets USA (an ADT company), and Aptive Environmental. This article is a challenge to every organization, large or small, to follow the great example set by these organizations. Do not ignore older workers, invest in them, and you’ll see how much they help your company flourish.

Finally, what can you do? As we all know, life is a constant learning process so make sure that you develop new capabilities, stay up to speed with new technology trends, continue to hone your “soft” skills, companies today desperately need them.

As always, Amevida is here to support you - check out the employment and training section of LiveAmevida.com to find some great resources that can help you in the next phase of your professional life.

In addition to this important issue, Fink also touches on energy policy, changing approaches to investing, and other topics in this year’s letter. Read it in full here >>