Rob Goldstein says retiring well isn’t easy
Our grandparents’ Social Security has become our social insecurity, as we live longer but with fewer guaranteed income sources to fund our retirements. That, says Robert Goldstein ’94, is a problem that society needs to confront.
Goldstein, head of BlackRock’s Institutional Client Business and BlackRock Solutions, and No. 5 on Fortune magazine’s 40 Under 40 list, was the featured speaker at a School of Management event in Manhattan. In his remarks to more than 100 alumni, Goldstein discussed the crisis that resulted from the Great Society turning into the Gray Society.
Social Security, when conceived, was supposed to provide payments for a much shorter time than it does today. Fixed-payment pension plans rarely exist anymore outside the public sector; most people are left on their own to manage private savings accounts.
“We’ve gone from collective to individual responsibility, and we never prepared anyone for it,” Goldstein says. “Most investors are not equipped to make investment decisions themselves. At BlackRock, we found that many people are concerned about outliving their savings. Many said it’s more important to keep the money safe, rather than to go after higher returns. In today’s low interest-rate environment, fixed-income securities won’t offer much benefit.”
Because they can’t afford to retire, older people stay in the workforce longer. That prevents the career mobility that would create entry-level openings, so new college graduates have a tough time entering the job market.
Goldstein says the solution is to provide investors with greater tools to do the job themselves. His firm offers free investment seminars for its employees. Goldstein jokes that investment advice isn’t enough incentive, so he offers free food.
“I feel strongly about this because I’m approaching midlife transition,” he says. “The concept of longevity will be a driving force in everything we see in society. It will impact our taxes, our school systems and make the skills we are taught that much more important. We’ve found that people don’t care about what types of investments they own. What they care about is having the retirement they feel they deserve. We’re doing what every company should do.”