Source: Fortune.com
Summary
BlackRock CEO Larry Fink has been warning Americans about not saving enough for retirement. According to a BlackRock survey, 62% of Americans have less than $150,000 saved for retirement, far short of the $2.1 million they think they need to retire comfortably. Warren Buffett’s advice for retirement savings is to invest for the long term and allow compound interest to power your portfolio. Buffett accumulated most of his wealth after the age of 65, when the power of compound interest kicked in. Fink has also warned about America’s retirement crisis, citing rising life expectancy and the failure of the 401(k) system.
Our Reading
The numbers tell one story. BlackRock’s $14 trillion in assets under management can’t hide the fact that Americans are far from ready for retirement. Buffett’s snowball analogy illustrates the power of compound interest, but it’s a lesson many Americans have yet to learn. Fink’s warnings about the 401(k) system and rising life expectancy only add to the sense of unease. The strategy enters a familiar phase: Americans are told to invest and stay the course, but the reality of preparing for retirement often differs from expectations.
Author: Evan Null
