BlackRock's Larry Fink thinks America's retirement age is 'a bit crazy'

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BlackRock CEO Larry Fink wants to rethink retirement. After all, the U.S. is not the Ottoman Empire.

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In his highly anticipated annual letter to investors, the 71-year-old billionaire said that "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."

The age of retirement is in some ways arbitrary. Germany was the first country to adopt such a social insurance program in 1889, designed by Chancellor Otto von Bismarck. The persistent myth is that Germany chose 65 as the standard retirement age because that's how old Bismarck was. (This has largely been debunked, given that Germany first introduced 70 as the retirement age, and lowered it to 65 several years after Bismarck had already died.) Nonetheless, the U.S. modeled its own social security plan on the German system, opting for a retirement age of 65 years.

With more people retiring, and longer retirements across the board as people live longer, Fink questioned whether the existing social security system is able to bear the heavy load of a growing retired population. With this "immense strain" on the system, Fink questioned: "When people are regularly living past 90, what should the average retirement age be?"

In the early-to-mid 20th century, more than half of working people didn't live long enough to retire, and as a result never received their payouts. That's changed.

"Today, these demographics have completely unraveled, and this unraveling is obviously a wonderful thing," Fink wrote. "We should want more people to live more years. But we can't overlook the massive impact on the country's retirement system."

Life expectancy for the total U.S. population is expected to climb (pdf) to 85.6 years in 2060, according to the Census Bureau. That would mean the average American would live off of retirement savings and social security for more than 20 years if they retire at 65.

The Social Security Administration warned in March 2023 that the trust funds that some 66 million Americans rely on will be depleted in 2034 (pdf), a timestamp that was moved up by one year from its previous estimate. That means people won't receive the full benefits they're entitled to unless Congress moves to reduce benefits or raise tax revenues — including by potentially raising the retirement age. 

"As a society, we focus a tremendous amount of energy on helping people live longer lives," Fink wrote. "But not even a fraction of that effort is spent helping people afford those extra years."