Larry Fink is the chairman of Blackrock, one of the world's largest investment management firms. Fink's annual letter to Blackrock shareholders typically addresses a range of topics, including market trends, economic outlook, and BlackRock's strategic direction. This year's letter was particularly interesting as it addressed retirement. Here are a couple of extracts from the letter. 

The full letter to shareholders can be read here: https://shorturl.at/dnp78

Investing helped his parents live comfortably in retirement 

"I went back and did the math. If my parents had $1,000 to invest in 1960, and they put that money in the S&P 500, then by the time they'd reached retirement age in 1990, the $1,000 would be worth nearly $20,000.1 That's more than double what they would have earned if they'd just put the money in a bank account. My dad passed away a few months after my mom, in his late 80s. But both my parents could have lived beyond 100 and comfortably afforded it".

Blame it on the Baby Boomers 

"It's no wonder younger generations, Millennials and Gen Z, are so economically anxious. 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.

Today in America, the retirement message that the government and companies tell their workers is effectively: "You're on your own." And before my generation fully disappears from positions of corporate and political leadership, we have an obligation to change that".

Help them spend what they save. 

"In 2018, BlackRock commissioned a study of 1,150 American retirees. When we dug into the data, we found something unexpected — even paradoxical.

The survey showed that after nearly two decades of retirement, the average person still had 80% of their pre-retirement money saved. We're talking about people who were probably between the ages of 75 and 95. If they had invested for retirement, they were likely sitting on more than enough money for the rest of their lives. Yet, the data also showed that they were anxious about their finances. Only 32% reported feeling comfortable about spending what they saved".

Energy infrastructure is what the world needs right now

As countries decarbonize and digitize their economies, they're supercharging demand for all sorts of infrastructure, from telecom networks to new ways to generate power. In fact, in my nearly 50 years in finance, I've never seen more demand for energy infrastructure. And that's because many countries have twin aims: They want to transition to lower-carbon sources of power while also achieving energy security. The capital markets can help countries meet their energy goals, including decarbonization, in an affordable way.

He is not a fan of gold 

Compare investing in gold with, let's say, investing in a new house. When you buy a home, that creates an economic multiplier effect because you need to furnish and repair the house; maybe you have a family and fill the house with children. All that generates economic activity. Even when someone puts their money in a bank, there's a multiplier effect because the bank can use that money to fund a mortgage. But gold? It just sits in a safe. It can be a good store of value, but gold doesn't generate economic growth.

Casually mentions he lost $100m 

I lost $100 million on a series of bad trades at First Boston and…well, nobody needs to hear that story again. But it led me (and my BlackRock partners) to pioneer better risk management for fixed income markets.

Hope v Fear 

In China, where new surveys show consumer confidence has dropped to its lowest level in decades, household savings have reached their highest level on record — nearly $20 trillion — according to the central bank. China has a savings rate of about 30%. Nearly a third of all money earned is socked away in cash in case it's needed for harder times ahead. The U.S., by comparison, has a savings rate in the single digits.

America has rarely been a fearful country. Hope has been the nation's greatest economic asset. People put their money in American markets for the same reason they invest in their homes and businesses — because they believe this country will be better tomorrow than it is today.

Starting out small

Over the past 36 years, BlackRock has grown from a company of eight people in a tiny Manhattan office into the largest asset manager in the world. But our growth is just a small part of a much larger success story.