The head of the world’s largest asset manager devoted his widely read annual letter to warning investors, policymakers and retirees of the calamitous economic threat posed by the world’s aging population. 

BlackRock CEO Larry Fink urged countries around the globe to shore up their capital markets to help people save for a comfortable retirement in a future where people live longer and relatively fewer workers support the economy. 

In his letter—past versions of which have set the agenda on topics like stakeholder capitalism and climate change—Fink called for “an organized, high-level effort to ensure that future generations can live out their final years with dignity.” 

Here are the takeaways: 

What’s the problem?: People are living longer than they ever have. By 2050, one in six people globally will be older than 65, up from one in 11 in 2019. Medical breakthroughs are a big reason, Fink noted, citing recently popularized weight-loss drugs like Ozempic and Wegovy as potentially raising life expectancy further. 

“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.” 

Blame the Boomers: Fink, who is 71, said his generation is largely responsible for the impending crisis. Pension enrolment in the U.S. has been declining since the 1980s, he said, but the government has maintained entitlement benefits for people his age “even though it might mean that Social Security will struggle to meet its full obligations when younger workers retire,” he wrote. 

“It’s no wonder younger generations, millennials and gen Z, are so economically anxious,” he said. “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.” 

What’s the fix? Fink said that while the U.S. is better off than many countries in preparing for retirement, it can do better. The country should ensure everyone, including gig workers and independent contractors, have access to a retirement savings plan, he said. (There are currently 57 million Americans who don’t.) Employers should also provide some level of matching funds to incentivize workers to save more, and make it easier for workers to transfer their retirement plans when they switch jobs. 

Fink also suggested raising the retirement age. “No one should have to work longer than they want to,” he said. “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.”

Where does Canada stand? Many of the same dynamics driving the retirement crisis Fink described exist in Canada. A report from Deloitte published last year found that 68 per cent of Canadians aged 55 to 64 had “low” or “very low” retirement readiness. The Caisse de dépôt et placement du Québec CEO Charles Emond said in 2022 that the pension fund manager would reach a tipping point this year where it’s paying out more money to retirees than it’s receiving in contributions from workers. 

Despite Canada’s aging population, the country’s pension system is relatively stable. It ranked 12 out of 47 countries on the latest Mercer CFA Institute Global Pension Index. That doesn’t mean fund managers and governments can coast, said F. Hubert Tremblay, partner and senior wealth adviser with Mercer Canada, in a statement at the time. The current economic environment, he said, “poses risks for employers, employees and the long-term efficacy of our retirement and healthcare systems like never before.”

ESG’s honourable (un)mention: Fink also called for “energy pragmatism” as the world grapples with the dual challenges of moving away from fossil fuels while achieving energy security. That, he said, will require a “massive amount” of new infrastructure from “telecom networks to new ways to generate power.” Notably, Fink avoided the term ESG in describing environmental, social and governance issues, an acronym he previously said has become “weaponized.”