BlackRock CEO Is Wrong About Raising The Retirement Age, Says Economist Who Called Out Musk—Shares 'The Only System That Works'

Last year BlackRock BLK CEO Larry Fink suggested it might be time to rethink the traditional retirement age of 65, arguing that as people live longer, they should work longer. But labor economist Teresa Ghilarducci strongly disagrees.

Ghilarducci, a professor at The New School for Social Research, calls the idea of working longer a “convenient untruth” and says it's not a real solution to America’s growing retirement crisis.

"Not everybody is living longer," she told CNBC's "Squawk Box." "The longevity gains have mainly gone to the wealthiest Americans." She pointed out that while some segments of the population are living longer, others, particularly lower-income workers, are experiencing declining life expectancy due to physically demanding jobs, stress, and economic hardship.

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Many older Americans are not even given the option to work longer. "Half the people who are retired say that they didn't retire. They were retired," Ghilarducci said, citing layoffs, health issues, or family caregiving responsibilities as common reasons for early retirement.

Instead of raising the retirement age, Ghilarducci believes the solution lies in increasing Social Security revenue. She made headlines when she highlighted how Elon Musk paying Social Security taxes on his full salary and some capital gains could cover 1/20 of the program’s deficit. "Imagine broadening that out to maybe 20,000 other people," she said.

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Public support for this approach is strong. Surveys show that most Americans prefer raising taxes on the wealthy over cutting benefits or working longer. Ghilarducci advocates for eliminating the payroll tax cap on earnings above $400,000 and gradually increasing the payroll tax rate.

She also supports a national retirement savings plan with mandatory contributions, similar to systems in other developed countries like Australia. "A universal pension system just like our universal Social Security system … is the only system that works," Ghilarducci said. “It’s not because I’m ideological about it, but practically, it is the only system that works.”

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And lastly, the professor believes that early and consistent savings, starting as young as 20 or 30, are key to a secure retirement. “We know that the most important financial power in our markets is compound interest. Getting people early into a pension plan is essential for building enough savings by retirement.”

While Fink and others argue that working longer is inevitable, Ghilarducci insists that giving workers a safe and effective way to save is a better solution. "The 401(k) system just doesn't cut it," she said. "We need a bold proposal to help everybody save for retirement."

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