As sage billionaires go, BlackRock chairman and CEO Larry Fink belongs in the same rarefied air as Warren Buffett.
And while he probably stopped worrying about his own nest egg a long time ago, Fink remains concerned for those retirees who do, or don't realize they should. Because for him, it’s personal.
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In his 2024 annual letter to shareholders, Fink recalled going through his parents' finances after his mother passed away and his father started to decline. He surmised that they never made more than a combined $150,000 a year in today's dollars. Yet was shocked that their retirement savings "was an order of magnitude bigger” than someone would expect for a couple with their income.
“And when we finished going over their estate, we learned why: My parents' investments,” he wrote. The experience reminded him that BlackRock was started "because we believed participating in those markets was going to be crucial for people who wanted to retire comfortably and financially secure."
In a March interview with Bloomberg, Fink addressed the financial challenges that keep Americans from retiring with dignity, which revolve around the overreliance on Social Security and the failure to save for investing.
Building on the ‘fantastic foundation’ of Social Security
"Social Security is a fantastic foundation for retirement," Fink said. "But if that's all you have when you retire, you're going to be living below the poverty line. It's supplemental but it's not meant to be the totality of what you have in retirement."
While there’s no consensus on how much money you need to retire (and everyone’s situation is different), one yardstick is the 80% Rule, where you plan to spend 80% of your pre-retirement income per year. Assuming you retire from a job with a $100,000 annual salary, Social Security won’t come close to cutting it.
Read more: Suze Orman says Americans are poorer than they think — but having a dream retirement is so much easier when you know these 3 simple money moves
The current average monthly benefit for retirees is $1,907, or just under $23,000 a year, according to the Social Security Administration. The shortfall? More than $57,000. The maximum benefit for an individual retiring at age 70 in 2024 is $4,873 per month or $58,476 a year.