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• Resume and Cover Letter
• Do Hiring Managers Actually...

Do Hiring Managers Actually Read Cover Letters?

5 min read · Updated on March 10, 2022

Even if a hiring manager doesn't read your cover letter, writing one will still help you stand out from other candidates.

Congrats — you've found a job that looks like a fit, and you've taken the time to craft a specialized resume for the role. But do you really have to spend more time writing a cover letter as well? Do recruiters even read cover letters anymore?

The short answers are “yes” and “sometimes.” However, it's the “sometimes” that can keep your interview chances alive, all other things being equal.

As a start, it's good to know some specific situations where you must write a cover letter.

When are cover letters necessary?

There are four very specific situations that will always require a cover letter.

You're applying directly to a specific person in the company, not through the general application system.

Someone has referred you for the position that you can mention in your cover letter.

It's requested in the job application.

The employer's hiring manager or recruiter specifically asks for it.

These all make sense, but what if none of those apply to your particular job application process?

Write a cover letter anyway.

Remember your mother telling you to always have an extra of whatever you need because it's better to have it and not need it than need it and not have it? That's a broad rule of thumb for cover letters; it's always better to submit one that might not be read versus a recruiter or hiring manager looking for one that's not there.

You can also find incentive for writing a cover letter once you understand the specific ways it helps you stand out as a candidate.

How does a cover letter help you get hired?

It's a tie-breaker.

Full disclosure: In my work as a recruiter, I barely glanced at cover letters — unless I had two equally qualified candidates and needed a deciding factor, or I was interested in a candidate, but their resume didn't tell me enough of what I wanted to know.

It shows you're serious about the job

Preparing a cover letter when one isn't formally required shows that you're willing to take the extra time and energy to show just how much you want the job.

Two recent studies by CareerBuilder also confirm that a cover letter never fails to impress. About 53 percent of employers feel a resume alone is not enough to get noticed, while 49 percent of HR managers said that including a cover letter is the second-best way to call attention to your resume, behind customizing that resume for the job.

The data also showed that cover letters made a strong impression whether the job was full-time, part-time, or an internship.

It can explain employment gaps and career changes

Sticking to a two-page resume means you can't clarify or explain that gap in your employment or why you went into a new career; this is the role of the cover letter. 

Instead of a hiring manager tossing your resume due to that employment gap, they can refer to the cover letter to better understand the circumstances surrounding it.

It has a big impact at small companies

Smaller companies often hire fewer people at a time, so their hiring managers will likely take the time to look for and read a cover letter to better understand each candidate.

It shows some of your personality

A cover letter can also help a recruiter or hiring manager see a bit of your personality to assess how you would fit with their company culture, so make sure you show off your personality in a way that is effective and professional .

Does anyone actually read cover letters?

As mentioned above, the best answer is “sometimes” — and it also can depend on who you ask.

TopResume's expert Amanda Augustine shares a good example of this:

“According to the 2016 Recruiter Nation Report by recruitment software provider Jobvite , 74 percent of recruiters do not consider cover letters important in their decision to hire an applicant. However, a poll from recruitment firm Robert Half found that 90 percent of executives consider cover letters to be invaluable when assessing candidates.”

The paradox is that even though they might not always read cover letters, most hiring managers always want them. 

The benefit for you is that whether it's read or not a cover letter always makes a good impression . Also, if the hiring manager for your job is someone who actually will read a cover letter, you want it to be there — your future career is too important to leave to chance.

What's in a good cover letter? 

Writing an effective cover letter is a topic in itself, but this is the basic information to include:

Introduce yourself and how you learned about the job.

Show how you would add value to the company.

Offer a solution for a pressing issue at the company.

Provide your contact information and availability for an interview.

Cover letters take time and energy to create, which makes it tempting to just not write them at all, but don't give in.

Whether you're applying online or through an email, the simple act of including a cover letter is impressive enough for employers to take notice. Even if no one reads it, a cover letter is worth the effort if it helps you score the job. 

Not feeling confident in your job search right now? It's tough out there — but we can help with a free resume review . 

Recommended Reading:

9 Cliches to Cut From Your Cover Letter Right Now

5 Things to Say in Your Cover Letter If You Want to Get the Job

How Do I Write a Great Cover Letter?

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From Bland to Beautiful: How We Made This Professional's Resume Shine

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See how your resume stacks up.

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• CV and Cover Letter
• Do recruiters actually read...

Do recruiters actually read cover letters anymore?

6 min read · Updated on June 20, 2023

Should you even bother writing a cover letter?

You've spent hours perfecting your CV and LinkedIn profile, then you hastily type a few lines as a cover letter and hit send. After all, do recruiters bother to read cover letters anymore?

Whilst online recruitment tools and digital portals don't always explicitly request one, the inclusion of a cover letter can grab the interest of an HR Manager, show your value, and make a strong case for why you're the right candidate for the job.

Here's all you need to know about the power of the cover letter and why including one ‒ whether requested or not ‒ will elevate your application and help you to put your best self forward.

Do employers really read cover letters?

The simple answer is, yes ‒ most of the time. Many employers like to see a cover letter because it shows two important things: that the candidate has gone the extra mile and that the candidate is serious about their application.

A stellar cover letter acts as a tool for the HR Manager to easily identify suitable applicants by drawing out their unique skills and personality, saving precious time in the shortlisting process.

True, there are some scenarios where the cover letter is not always a prerequisite. The way in which we apply for jobs is evolving, and digital recruitment is becoming increasingly popular. The 2019/2020 XpertHR key recruitment metrics survey reveals that social media as a candidate-attraction method has grown dramatically in recent years, and LinkedIn is used in the recruitment processes of more than nine in 10 organisations (93.2%).

Also, cover letters aren't always necessary when applying via an applicant tracking system  - some organisations set questions to answer that are tied to their values and culture instead.

Even the best cover letters only form part of the overall decision-making process. This is particularly true when HR Managers are considering applications from neurodivergent people, to account for the advantage given to those who can write well.

However, cover letters still hold a lot of value and candidates should think twice before simply hitting the Easy Apply button. It may save time, but this efficiency could be at the expense of quality, as the recruiter will see only a snapshot of your LinkedIn profile rather than the relevant and interesting parts of your career story that a cover letter could supply.

A poll by UK job site reed.co.uk shows that 36% of respondents consider a cover letter "quite important" when receiving an application from a candidate, with 20% seeing them as vital, stating that they wouldn't consider an application without one.

As an HR Specialist for a London-based IP law firm, I draw on 20 years of experience in HR, and contacts from inside the industry and recruitment community, to form my opinions. I believe that yes, cover letters are still being read .

What HR Managers are looking for in a good cover letter

The main purpose of the cover letter is to formally convey your interest in the role, but it also provides a valuable platform to amplify your expertise, skills, and qualifications.

First impressions count and a bad cover letter could make all the difference between success and rejection. So what are recruiters really looking for in a good cover letter, and how can you ensure that yours is distinctive?

Put the effort in

Similar to following LinkedIn profile best practices , you should give your cover letter the same level of attention. Avoid rushing the writing process or simply cutting and pasting sections of your CV in a panic; it will reflect in the content and appear obvious to the HR Manager.

Take the time to do some thorough research. You should familiarise yourself with the company and department's brand values, their current projects, and any recent successes. Identify keywords from the job advert and use them to demonstrate how your skills, abilities, and personal values match up to the company. If you address the HR Manager by name in a cover letter rather than generically (even if it involves some extra fact-finding) it adds a warm but professional touch.

Before submitting, take the time to check the spelling and grammar and proofread your cover letter ‒ then proofread again.

Be comprehensive but concise

Your cover letter should be around half a page to one page in length. Aim for 250 words, but never more than 400 to keep the reader engaged. Consider dividing your cover letter into sections with an introduction, a main body comprising two to three paragraphs and a strong ending. Alison Green, writer of Ask a Manager , has some fixes for bad ways to open a cover letter.

Go beyond simply listing your knowledge, skills, and career history to date. You should engage carefully with the job requirements and clearly and explicitly show what you have done, rather than tell them. For example, " At ABC company, I achieved X, Y and Z."  Being specific with your personal contributions and achievements will convince the HR Manager you have exactly what they need.

When describing your accomplishments, consider using action verbs in your CV to keep things concise but powerful. Examples include "improved," "transformed," "resolved" and "pioneered."

Show your personality (but not too much)

A cover letter can provide valuable insight into your personality and show how you would fit well with the company culture . It provides an opportunity to creatively expand on any career gaps in your CV in more detail, such as an intentional career break or family leave to raise children. It also provides an opportunity to add any periods of volunteering .

It could also help you to challenge any potential unconscious bias in the hiring process , by confidently explaining your knowledge, experience, and expertise and using your background to your advantage.

However, you should steer away from being too familiar, using jokes, or making reference to something personal about the HR Manager that you may have seen on LinkedIn. You're not an employee (yet), and you could unintentionally blur the line between confidence and arrogance.

On the flip side, you should also avoid using overly formal or stilted language, industry jargon, or complicated words that you wouldn't normally use, such as "advantageous" instead of "helpful." Try reading your cover letter aloud, videoing yourself, and watching it back, or asking someone you trust to listen to you read; if any elements don't sound like you, re-work them until you're happy they do.

Ideally, you should find a balance between appearing credible and serious about your application, whilst remaining friendly and approachable.

Use your letter to get ahead

Even if a cover letter is not specifically requested, providing one could give you a competitive advantage. A carefully crafted and engaging cover letter could grab the attention of the hiring manager – and help you to land your dream job.

Any successful cover letter must be paired with a strong CV. Get a free CV review to find out how yours fares.

Recommended reading:

Writing a cover letter? Start by cutting these clichés

Are a CV and cover letter the same?

What should a cover letter include? Start with these essentials

Related Articles:

What File Format Is Best for Your CV? Pros + Cons

Best fonts to use for a CV (with examples)

Should you put your address on a CV (with examples)

See how your CV stacks up.

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Do Recruiters And Hiring Managers Read Cover Letters?

• To find out information that may not be in your resume or immediately obvious
• To get a fast overview of your most relevant experience
• Lastly, to find out why you are interested in their company or their opening

Related Posts:

How To Keep Your Cover Letters From Landing In The Trash

How To Write A Cover Letter That Practically Guarantees You An Interview

Spring Cleaning: 4 Ways To Fix Your Job Search

Is your job search turning into a grind with no end in sight? It may be time to take a step back and reevaluate your entire approach.

In cold weather climates, the beginning of spring is a time to clean the house and get organized—a practice known as spring cleaning. Through the years, spring cleaning has taken on a larger meaning with people using the time to organize and declutter things in their lives.

For professionals on the job hunt, a little spring cleaning (metaphorically speaking) could be a great way to reinvigorate your job search. Here are a few strategies your job search spring cleaning should include.

Reevaluate Your Job Search Approach

Make a list of the last handful of jobs you applied for and see if you can identify any positive or negative trends. Consider things like:

• How did I learn about this job?
• How did I apply for the job?
• Did I earn an interview?
• What was the ultimate result?

A lot can be learned about your job search approach just by answering these questions and identifying patterns. For example:

Negative Trends

You discovered five jobs through job boards, applied to all of them via the job boards, and never heard back from any of them.

The common pattern here is applying through job boards. This isn't to say that job boards don't serve a purpose in the job search process, but they have their limitations , and you can't run your job search entirely off of them. When you apply through a job board, there's a good chance that your materials will never get past the applicant tracking system (ATS) and never be seen by an actual person.

One simple fix is to research who the hiring manager or recruiter is that posted the position and email your materials to them directly.

The more efficient fix would be to take a proactive approach by putting together a bucket list of companies that you want to work for and start making connections on LinkedIn with people who work at those companies. You may already know some people who work there or have connections that can refer you to some individuals.

This is a great way to network your way onto a company's radar.

Positive Trends

You applied to three jobs via referral, were invited to two job interviews, and made it through multiple rounds of interviews for one of the jobs before being passed over for someone with a little more experience.

The pattern here is that getting referred to a job by a professional acquaintance is a great way to land a job interview . This indicates that you're leveraging your network well and you should continue to focus on your networking efforts.

The next step is to review the interview process and determine what went well and what needs to be improved. Sometimes the interviewer will provide feedback , and that feedback can be valuable. However, not everyone is comfortable with giving feedback.

Chances are you probably have a good idea about areas of improvement and the skills you need to gain. Put together a plan for addressing those shortfalls.

The good news in making it deep into any interview process is that it indicates that the company likes you as a potential employee (even if the timing just wasn't right) and the experience could be a roadmap to a job with that company at a later date, or another similar opportunity elsewhere.

Give Your Resume & Cover Letter Some Much-Needed Attention

Are you continuously sending similar resumes and cover letters to each job opening with only minor adjustments? If so, your strategy needs some serious spring cleaning.

Let's start with resumes!

Every resume should be tailored to the position in order for it to stand out to recruiters and hiring managers . It may seem like a lot of work, but it's actually less work than submitting the same resume over and over again and never hearing back.

The reason why it's so important to tailor your resume is that throughout your career, you acquire numerous skills, but the job you're applying for may only be focusing on 6-8 of those skills. In that case, those skills must rise to the top of the resume with quantifiable examples of how you successfully used those skills at previous jobs.

Remember, recruiters go through hundreds of resumes. They need to be able to tell from a quick glance whether or not you're a potential candidate for the position.

While updating your resume, you could also spruce up your LinkedIn profile by highlighting the skill sets that you want to be noticed for by recruiters.

As for writing a good cover letter , the key to success is writing a disruptive cover letter . When you write a disruptive cover letter , you're basically telling a story. The story should focus on how you connect with the particular company and job position. The story could also focus on your personal journey, and how you got to where you currently are in your career.

If your resumes and cover letters aren't unique, now is the time to clean things up and get on track.

Build Your Personal Brand

Just because you're looking for work doesn't mean that you don't have anything to offer. Use previous career experiences and passions to build your personal brand .

Ask yourself, "How do I want other professionals to view me?"

Pick an area of expertise and start sharing your knowledge and experience with your professional network by pushing out content on your LinkedIn and social media accounts. Good content can include blogs, social media posts, and videos.

By sharing content about your experiences and passions, you slowly build your personal brand, and others will start to notice. The content could lead to good discussions with others in your network. It could also lead to reconnecting with connections that you haven't spoken to in years, or making new connections.

You never know when one of these connections could turn into a job lead or referral. The trick is to get on people's radars. So, when you're cleaning up your job search, be sure to build a plan for personal branding.

Maintain Healthy Habits During Your Job Search

Your job search is important, but it's even more important to know when to pull back and focus on personal health and spending time with family and friends.

There are actually things that you can do for your own enjoyment that could help your job search in the long run, such as:

• Grab coffee with a friend - It's good to engage in light conversation with friends during challenging times. And if your job search does come up, remember that most people have been through it themselves and you never know when a friend may provide you with a good idea or lead on a job.
• Volunteer - Volunteering is a great way to get involved in the community and help others. In addition, if you develop a little bit of a career gap while looking for a job, you can always talk about how you filled that time volunteering, if you're asked about it during a job interview.
• Continue to focus on other passions - Are you a fitness nut? Blogger? Crafter? Continue to do the things that bring you happiness. And if you're in a position to profit from your passion through a freelance job or side hustle , even better!

Spring is the perfect time to clean up and improve your job search so you can land the job you want. If you're struggling to find a job, follow the tips above to reinvigorate your job search—and watch your career blossom!

Need more help with your job search?

Become a member to learn how to land a job and UNLEASH your true potential to get what you want from work!

This article was originally published at an earlier date.

3 Tips On What NOT To Do In Your Cover Letter

Now hiring: remote sysops engineer, 3 important career lessons learned on and off the field, how ex-nfl player, chris gronkowski, is using social media to change careers.

Cover Letters: Do Recruiters Actually Read Them?

• Post author By Aimee Bateman

A cover letter is an opportunity to connect with the hiring manager. It is your opportunity to make them want to meet you over the many other CVs they have in their inbox.

Some say that employers don’t value them, but people must remember that the hiring manager is not just an email address – they are a person. Each has his or her own likes and dislikes and there are many who put a huge amount of value on cover letters.

What most hiring managers seem to agree on is that they do not value cover letters that read something like this:

To whom it may concern, I am applying for the role of ……… I feel I have the skills you are looking for. Please see my CV enclosed/attached. I look forward to hearing from you Mrs. A Bateman

And yet, so many cover letters that I see are similar to this one. What a wasted opportunity!

10 years ago, when I first started recruiting, this type of cover letter would probably do the job. However, in the current market, people have to ‘up their game’!

In order to make sure your cover letter is exceptional I would advise you follow these steps:

• Make it Personal – Do your best to find out the name of the hiring manager (even if you have to call the receptionist and ask).
• State The Position You are Applying For  – It’s obvious (I know) but I receive so many applications which say ‘ I would like to apply for the role advertised ’ and I am often working on more than one.
• Tell Them Why You Picked Them – If you want an employer to be genuinely interested in you, you need to make them feel that you are genuinely interested in them.
• Tell Them Why They Should Pick You – Don’t just tell them you are suitable; tell them why you are suitable.
• Add A Short Quote From a Referee – I graduated with a marketing degree and for three years I studied how advertisers and marketers use positive customer experiences to sell products/services. When I joined the recruitment world, I noticed that we have these and they are called references, but they are used at the end of the sale process!?! Your references/testimonials are your best sales tool, so use them and input a quote from your best one.
• Tell Them How Much You Want It – Show some passion and use emotive language!

I can promise you that far more employers will value a cover letter than those who won’t, so always include one and make it count. Have you had any success with cover letters? Let us know in the comments below.

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By Aimee Bateman

Aimee Bateman worked for some of the world's largest recruitment companies, before setting up her own consultancy. She has helped thousands of people get their dream jobs and has appeared in a number of TV programmes as the 'Recruitment Expert' on BBC 1 and BBC 3. Aimee is also the founder of Careercake.TV which is designed to help people thrive in their careers. Follow Aimee on Twitter @CareercakeTV .

Does anyone actually read cover letters?

Is it worth writing cover letters anymore? YES. We asked recruiters if they read cover letters and the answer isn’t only “yes”. It’s that a Great cover letters help recruiters sell candidates to clients. If you’re applying direct, hiring managers and human resources teams also find cover letters useful to determine whether it’s worth reading further,” says Ward. The way your cover letter looks will also influence whether or not it will get read. “About three quarters of a page is just right and bullet points really help the recruiter or employer scan for information and keywords. The subheadings should paraphrase the requirements as stated in the job advertisement,” says Ward. “Under those headings include tangible points rather than general fluffiness or buzzwords such as “collaborator” or “team player”. If you are (a team player), give examples and quantify. We can use those examples from the agency perspective to sell you to an employer.”  

• Erica Lindberg of Hudson: “My take on it is that it doesn’t hurt to send in a cover letter if it is done well, but it can detract from an application if executed poorly. A great cover letter shows you are specifically interested in that vacancy,” says Lindberg. “Cater your elevator pitch to be relevant to the vacancy and if the job advertisement mentions certain requirements, make sure your cover letter specifically addresses them. Mirror the language used in the advertisement to highlight how your past experience matches the requirements and will add value to the business. This will help capture the reader’s attention - especially if the recruiter or employer is using an applicant tracking system that scans for keywords.” A word of warning: Lindberg sees cover letters where the name of the person, the organisation, or both are wrong. If you’re selling yourself as someone with “attention to detail” then a slip up like this is a little like shooting yourself in the foot. While she will still read the letter, a clanger like this doesn’t help with first impressions. Make sure you enlist the help of friends and family to double check your cover letter for typos and autocorrect errors. A spell checker will pick up the worst typos, but not necessarily transposed or autocorrected words. You need another human brain for that.

Finally, remember the cover letter can make the difference between landing that interview, or going back to the drawing board. We encourage you to take the time to pen the best cover letter you can. For some more advice on how to tailor your cover letter to the job, click here . 

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Does HR read cover letters anymore? And why you still need to write one

Job seekers and LinkedIn users love to ask, “does HR even read cover letters anymore?” The answer is that it depends. Some HR or hiring people say they always read the cover letter. Other HR and hiring people say they never do. 

It doesn’t actually matter if they read it or not. You’ll write it as if you think they’ll read it, but you don’t write the cover letter for the hiring person. You write it to get clarity on why you’re applying for the job. 

The first things you need to know when writing a cover letter are:

• why you want the job
• what qualifies you for the job
• what you’ll do for the company if you get the job

This is exactly what you need to know when they call you for the interview screening call. Take the time to write the cover letter properly now, so you can figure out if it’s even a job you want. If you can’t give a more compelling reason than “I need a job”, it isn’t the right job to apply for.

Look at the company you’re applying to. Write out 10 compelling reasons why you want to work for this particular company and in this particular role. Once you have 10 reasons, choose one or two to add in your cover letter, ideally the first paragraph.

Written strategically, you’re prepped for the job interview too

If you write your cover letter this way, you’ll have the answers for the first screening interview call.  They usually ask:

• why do you want this job?
• what qualifies you for this role?
• what will you do for us if you were hired?

Writing a cover letter shouldn’t feel like torture. It should feel easy and take you less than 30 minutes.

The 8-step method of writing cover letters

When I work with clients, I teach an 8-step method to write an authentic cover letter. Authentic means the letter sounds like them and is interesting to read. They end up saying, “that was easy, it just flowed.” The difference between their old cover letter that had zero personality and their new one is huge. The old ones usually have cliche sayings, generalities, and include stuff like:

“I am an ambitious project manager with 10 years of experience”

“I know by reading the job ad and listed qualifications, I would be a great match.”

“We both value honesty, innovation and thinking outside of the box” (the most inside the box statement ever)

The new cover letter sounds fresh, inviting and like a real person wrote it.

Which would you rather read?

The most impressive cover letter I ever wrote

This may sound like folklore, but I once wrote a cover letter that was photocopied by a VP (with 35 years of HR experience). She circulated the cover letter around the entire office as “the best cover letter she ever saw.”  When I read that cover letter now, I groan. Technically, it’s not perfect. But, I understand why she was impressed by it. 

The cover letter was specific

The cover letter was authentic.

The cover letter addressed a possible barrier.

The cover letter made it seem like a would be a great fit for them and that I understood their work.

I share this infamous cover letter, plus the 8-step guide in the Writing Authentic Cover Letters course: https://lnkd.in/ed9MjrS

The course is worth taking if you find writing cover letters uninspiring. They can be a delight to write & read. Cover letters are one of the most helpful documents for a job seeker, whether they get read or not. They’re a gift for you and your search. 

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Kerri Twigg

Career Coach | Mindfulness and Stories Training for Career Contentment

Awesome content here about Cover Letter. Thanks for the video, Kerri.

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How important is a cover letter? Very. Here's how to stick the landing: Ask HR

Johnny C. Taylor Jr. tackles your human resources questions as part of a series for USA TODAY. Taylor is president and CEO of the Society for Human Resource Management, the world's largest HR professional society and author of "Reset: A Leader’s Guide to Work in an Age of Upheaval.”

The questions are submitted by readers, and Taylor's answers below have been edited for length and clarity.

Have a question?  Do you have an HR or work-related question you’d like me to answer?  Submit it here .

Start the day smarter. Get all the news you need in your inbox each morning.

Question: I’ve always had trouble crafting a cover letter. It often seems redundant to the information in my resume. What is a good strategy for writing a cover letter? – Dierdre

Answer: Your No. 1 priority in your job search is to make you stand out among the sea of applicants. Start by personalizing your cover letter for the respective position.

Hiring managers are well-versed in spotting generic cover letters. Many don’t even mention the organization or the specific position. A cover letter customized for each role you apply to will set you apart from the other candidates.

Your cover letter should complement, not replicate, your resume. Resumes itemize employment information and qualifications, while customized cover letters provide an additional opportunity to tell your story and delineate your goals and intangibles. Cover letters should contextualize the value of the experience outlined in your resume.

You are essentially looking for a fit between your skills and personality to a defined role and work environment. A customized cover letter gives the hiring manager a preview of an interview. It signals that you are genuinely interested in the organization and discussing why you might be a prime candidate.

Remember to tailor the letter to showcase your relevant qualifications and accomplishments and project how you would fit in the role. Hiring managers look for people who will not only be a good fit but will also be an asset to their company for the long term. A well-crafted cover letter can demonstrate your potential value and fit for an organization.

I wish you much success in your career journey.

Work or school?: Should I accept a job offer while still in college? Ask HR

Poor job review: How do you respectfully disagree with a performance review? Ask HR

I enjoy my job, but the recent uptick in the cost of living feels almost like I’m taking a pay cut. What’s the best way to ask for raise without jeopardizing the good relationship with my employer? – Mack

Request for raises should not surprise most employers. However, you should be thoroughly prepared to state your case for a more competitive wage.

First, do your research. Examine market salary data and assess how it compares with your own. Be sure to factor in your experience, job duties, and education. Review similar job postings to gauge comparable starting salary information and perks or bonuses used to attract talent. Understand your organization’s compensation philosophy and pay merit increase process. HR can help you better understand their pay structure if it is unclear.

Be prepared to confidently justify your request for higher pay. Has your workload increased due to staffing shortages? Have you taken on additional assignments or roles and learned new skills or technology? If possible, quantify the value you have added to their business.

Especially given the state of the economy, be prepared for your employer to stand their ground and not make out-of-cycle raises.

Next, plan a meeting with your manager with an apparent reason for the discussion and a brief agenda to stay on track – craft written talking points for the meeting. Choose a time and date when your workload is moderate. Be sure to communicate your satisfaction with the job and the organization. Be open to feedback and ask for a follow-up meeting to discuss the final decision. Your manager will most likely need to consult with HR or their manager before making any pay adjustment decisions.

Remember, your employer may be unable to accommodate your request due to budget constraints. If a pay increase is not feasible, inquire if there are considerations for earning a raise in the future. Be prepared with alternative suggestions, such as learning a new skill or taking on stretch assignments. Consider areas where the company is struggling and make suggestions on ways you can fill the gap. Be creative.

Regardless of the outcome, remain flexible and open. Look at alternative perks, benefits, or bonuses instead of a base pay increase.

This article originally appeared on USA TODAY: How important is a cover letter? Very. Here's how to stick the landing: Ask HR

More From Forbes

Writing Cover Letters For A Career Change: Tips And Examples

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Embarking on a career change is a pivotal moment, fraught with uncertainty but brimming with potential. And especially in cases where your resume might not directly align with the job at hand, your cover letter becomes the narrative that connects the dots. A well-crafted cover can illuminate your strengths, align your past experiences with your future aspirations, and persuade potential employers to see the value you bring.

The Importance Of A Cover Letter In Career Changes

In career transitions, your cover letter is your storyteller. It explains the why and the how of your career change, showcasing your enthusiasm and demonstrating how your background equips you with unique perspectives and transferable skills. It addresses potential concerns about your career shift head-on, presenting your transition as an asset rather than a liability.

Tips For Writing A Career Change Cover Letter

1. Personalize Your Approach : Address the letter to a specific person whenever possible. Doing so demonstrates attention to detail and a genuine interest in the position. You want to show that you’re not conducting a generic job search, but that you’ve done your research. You’ve perused (not skimmed) the company website and you read that 20-page yearly report from the CEO. You’ve even read their blog and can quote freely from it. You’ve educated yourself.

2. Emphasize Transferable Skills : Highlight the skills and experiences from your previous roles that are relevant to the new position. Be specific and quantify achievements where possible.

3. Show Enthusiasm and Commitment : Employers want to know that you are genuinely interested in the new field. Express your passion for the career change and your eagerness to contribute.

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4. Tailor Your Narrative : Connect your past experiences to the job you're applying for, demonstrating how your unique background can bring a fresh perspective to the role.

5. Address Potential Concerns : Be upfront about your career change, framing it as a positive decision guided by clear motivation and a strong understanding of the new field.

6. End with a Strong Call to Action : Conclude by expressing your desire to discuss your application further in an interview, showing proactivity and determination.

7. Use Strategic Language : Avoid clichéd adjectives. Opt for vivid, specific language that paints a clear picture of your capabilities and achievements.

Example: General Career Change Cover Letter

Dear [Hiring Manager's Name],

I am excited to apply for the [Position] at [Company], transitioning from a career in [Current Industry] to [New Industry]. My experience in [Current Industry] has equipped me with valuable skills that I am eager to apply in [New Industry]. For instance, while working as [Previous Position], I developed a keen ability to [transferable skill], resulting in [specific achievement].

In [Current Industry], I honed my skills in [relevant skill] and demonstrated my ability to [relevant achievement], directly benefiting my team by [specific outcome]. I am particularly drawn to [New Industry] because [reason for interest], and I am enthusiastic about the opportunity to bring my [specific skill] and [another skill] to the [Position] at [Company].

[Your Name]

Tweaks For Various Career Stages

Whether you are making a change early in your career or transitioning later, your cover letter should reflect your rationale and excitement for this new path.

Example: Early Career Cover Letter

As someone at the early stages of my career, I am eager to leverage the foundational skills I gained in [Initial Field], such as [specific skill], in [New Field]. My recent role as [Previous Position] allowed me to develop [relevant skills or experiences], which align closely with the requirements of the [Position] at [Company].

Example: Late Career Cover Letter

Transitioning into [New Field] at this point in my career is a deliberate and enthusiastic choice, driven by my deep-seated interest in [aspect of New Field]. With extensive experience in [Previous Field], I bring a wealth of knowledge and a unique perspective that can contribute to innovative solutions and strategies at [Company].

Tweaks For White And Blue-Collar Roles

Transitioning between white and blue-collar roles offers a unique opportunity to highlight diverse skills and experiences.

Example: White To Blue Collar Cover Letter

I am eager to apply the strategic and managerial skills honed in my white-collar career to the hands-on, dynamic environment of [Blue Collar Field]. My experience in [White Collar Role], where I developed [specific skills], aligns well with the challenges and responsibilities of the [Blue Collar Position] at [Company].

Example: Blue To White Collar Cover Letter

Transitioning from [Blue Collar Field] to [White Collar Field], I bring practical, on-the-ground experience that can inform and enhance the strategic decisions in [White Collar Role]. My background in [Blue Collar Role], where I mastered [specific skills], equips me with a unique perspective beneficial for the [White Collar Position] at [Company].

Including A Career Change Statement On Your Resume/CV

While your cover letter is the ideal place to elaborate on your career change, your resume/CV should also reflect this transition. A brief career change statement, positioned at the beginning of your resume, can effectively set the context for your career narrative. This statement should succinctly convey your transition, emphasizing your commitment to the new field and highlighting any transferable skills or relevant experiences.

How To Craft A Career Change Statement For Your Resume

1. Objective Statement : Begin with a clear, concise objective that outlines your career goals and demonstrates your enthusiasm for your new field.

2. Summary of Qualifications : Follow your objective with a brief summary of your most relevant qualifications, focusing on skills and experiences that transition well into your new career.

3. Highlight Transferable Skills : Clearly identify and emphasize any skills from your previous career that are pertinent to your new path. This not only demonstrates your capability but also shows your proactive approach in aligning your skill set with the new role's requirements.

4. Tailor Your Experience : Adjust the descriptions of your past positions to highlight the responsibilities and achievements most relevant to your desired career path. Use quantifiable achievements to underscore your adaptability and impact.

5. Education and Training : If you have pursued any education or training relevant to your new field, highlight this prominently on your resume to illustrate your dedication and commitment to your career change.

Make Your Language Unique

To avoid sounding like everyone else, remember to use distinctive and precise adjectives in your cover letter and resume. For instance:

• Instead of "experienced," try "seasoned" or "accomplished," providing specific examples that demonstrate this experience, like spearheading a successful project or leading a team to exceed its targets.
• Replace "passionate" with "enthused" or "committed," detailing a project or initiative you pursued with zeal, which can resonate more authentically with hiring managers.
• Substitute "results-driven" with "outcome-focused," illustrating this with a particular scenario where your focus on results led to tangible success for your organization.

Your cover letter and resume are your advocates, narrating your professional journey and articulating why you are not just seeking a new job, but embarking on a new career with purpose and passion. By carefully crafting these documents to reflect your individual story, you position yourself as a memorable and compelling candidate, someone who stands out from the crowd.

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What to Know About Donald Trump’s New $60 Bible

“all americans need a bible in their home, and i have many. it’s my favorite book.”.

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Mother Jones illustration; Shealah Craighead/White House/ZUMA

One month after releasing a line of gilded high-tops for $399, Donald Trump revealed on Tuesday a new item: the Bible. “All Americans need a Bible in their home, and I have many,” the former president explained in a video promoting the country singer Lee Greenwood’s version of a King James translation, the “God Bless the USA Bible.”

“It’s my favorite book,” Trump added.

Throughout the rest of the clip, as if daring us into a collective disgust, Trump swerved through random opportunities to rail against bureaucrats and a country under threat—all while hawking a holy text.

But his latest sales pitch also prompted some legitimate questions. Such as: What the hell is going on? And: Excuse me? Here, we try to answer some of the queries.

So, that first question—what the hell—but more formally: What exactly is Trump promoting and how much will it cost me to shell out for this? 

Trump is encouraging his supporters to buy a Bible endorsed by himself and Lee Greenwood. It costs $59.99, without taxes or shipping included. That seems to sit on the more expensive end of Bibles on sale at Barnes & Noble . But those books presumably don’t include copies of the Constitution, the Bill of Rights, and the handwritten lyrics to the chorus of Greenwood’s “God Bless the USA.”

The “God Bless the USA Bible” does include these items .

Trump is in a serious cash crunch . So is he going to make money with this Bible?

According to the book’s official site , the God Bless the USA Bible has nothing to do with Trump’s campaign. It is “not owned, managed, or controlled by Donald J. Trump, The Trump Organization, CIC Ventures LLC, or any of their respective principals or affiliates.” Instead, Trump’s “name, likeness, and image” are being used “under paid license from CIC Ventures LLC.”

Wait, what is CIC Ventures LLC, though?

Okay, so CIC Ventures LLC is, according to the  Washington Post , basically a pipeline to Trump:

In [Trump’s] financial disclosure released last year, he’s identified as the [CIC Ventures LLC’s] “manager, president, secretary and treasurer” and the Donald J. Trump Revocable Trust is identified as a 100 percent owner of the business. The same entity also receives royalties from his book “A MAGA Journey” and speaking engagements.

In case it’s not already obvious: if you look at the company’s documents, you’ll find the principal address for CIC Ventures LLC is 3505 Summit Boulevard, West Palm Beach, Florida. That is a Trump golf course . Moreover, in a 2022 disclosure, Nick Luna is listed as a manager. Luna was Trump’s personal assistant and body man.

So, I’m sorry, but let me ask again: Is Trump making money off this?

The New York Times reports that “according to a person familiar” (classic) Trump will receive royalties from sales.

You could have just said that.

I wanted to tell you about the other stuff I found. Any other questions?

Yes. Who is Lee Greenwood?

The country singer who wrote “God Bless the USA.” Greenwood is a fierce MAGA guy who otherwise made news after pulling out of an NRA concert in response to the Uvalde, Texas, mass shooting.

Does Greenwood have a Christmas album with an oddly sexual cover?

Yes. Look at this .

Perfect sweater. Anyway, I feel like I’m experiencing deja vu. Hasn’t Trump made headlines before with a Bible?

You’re probably recalling that despicable photo-op when Trump held up a Bible in front of St. John’s Church, which had been a location of racial justice protests in the days prior. There was a complicated saga, afterward, about whether or not Trump deployed the police to clear protesters to get to the church. An Inspector General’s report ultimately concluded that he did not.  

Man, it’s pretty rough remembering all the awful shit we went through with him as president.

Yep. If you ever want to wallow in political depression, check out this quick compilation .

But wait. Wasn’t there another time Trump and the Bible made waves for something far more stupid?

Christian nationalists adore Trump, so there have probably been many times that Trump has referenced the Bible. But you might also be thinking of this incredible clip of Trump attempting to name his favorite verse .

Has a presidential candidate ever partnered on a holy text sale with a country musician?

Not to my knowledge. But this is from a dude who just last week seemed to compare his current legal jeopardy with the persecution of Jesus Christ. Happy Easter!

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Medicare plans can now cover Wegovy for patients at risk of heart disease

Yuki Noguchi

Carmel Wroth

Wegovy, a semaglutide medication, will be covered by Medicare. George Frey/Bloomberg via Getty Images hide caption

Wegovy, a semaglutide medication, will be covered by Medicare.

For the first time, Medicare will allow coverage of one of the new blockbuster weight-loss drugs for enrollees in Part D plans.

The plans may now cover Wegovy when prescribed to prevent heart attacks and strokes, according to a new policy issued this week from the Centers for Medicare and Medicaid Services.

Wegovy is a GLP-1 agonist, a class of obesity drugs promising a sea change in weight loss. They act on hormones and the brain to drastically reduce appetite, among other things.

But Medicare is prohibited from paying for weight-loss treatments so seniors have had to pay out of pocket for the drugs or use supplemental insurance. In early March, the Food and Drug Administration expanded the approval of Wegovy to say the drug can be used to reduce the risk of cardiovascular death, heart attack and stroke in people with cardiovascular disease and either overweight or obesity.

In clinical trials, Wegovy was found to reduce risks of cardiovascular events by 20% in higher weight patients.

That finding prompted CMS to change its Medicare Part D drug program to cover Wegovy, although it noted that this applies only for those patients struggling with both weight and heart disease. In other words, the injections, which can cost well over $1,000 a month out of pocket, will not be covered for enrollees only seeking to lose weight.

The new guidance also applies to state Medicaid plans, which also would be required to cover Wegovy for patients with both higher weight and heart disease risk.

Obesity doctor Angela Fitch says that the move to cover it even for a limited subset of patients is still significant. She's president of the Obesity Medicine Association, a group that advocates for treatment.

"It's certainly a big step forward, compared to no coverage at all," she says. "At least now we'll have coverage for those people who have a known history of heart disease," she says. "So hopefully that will trickle down into covering it for everybody with overweight and obesity."

And, Fitch notes, Medicare sets the standard for coverage in insurance generally, so this move could ultimately affect more patients. "My hope would be that commercial insurance would follow."

In a statement, a CMS spokesperson said: "CMS is committed to ensuring that people have access to treatments and treatment options that improve health outcomes."

The Medicare guidance could also expand the use of other similar medicines. It states that anti-obesity medications that receive FDA approval for an additional condition other than weight-management alone, can be considered a Part D drug for that specific use. For example, if one of the drugs receives FDA approval to treat diabetes or prevent cardiovascular disease, Medicare part D plans may cover it for that use.

However CMS specified they may also require prior authorizations to ensure that is being used only for the approved use.

In a statement, Wegovy's maker Novo Nordisk said it was "encouraged" by the new guidance from CMS but said it hopes to see Part D coverage expanded for "obesity medicines when used for chronic weight management."

The drug maker is among those pushing for Congress to expand coverage of treatments for obesity.

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I invest on behalf of my clients.

I consult or invest on behalf of a financial institution.

I want to learn more about BlackRock.

Larry Fink’s 2024 Annual Chairman’s Letter to Investors

Time to rethink retirement.

When my mom passed away in 2012, my dad started to decline quickly, and my brother and I had to go through my parents’ bills and finances.

Both my mom and dad worked great jobs for 50 years, but they were never in the top tax bracket. My mom taught English at the local state college (Cal Northridge), and my dad owned a shoe store.

I don’t know exactly how much they made every year, but in today’s dollars, it was probably not more than $150,000 as a couple. So, my brother and I were surprised when we saw the size of our parents' retirement savings. It was an order of magnitude bigger than you’d expect for a couple making their income. And when we finished going over their estate, we learned why: My parents' investments.

My dad had always been an enthusiastic investor. He encouraged me to buy my first stock (the DuPont chemical company) as a teenager. My dad invested because he knew that whatever money he put in the bond or stock markets would likely grow faster than in the bank. And he was right.

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.

Why am I writing about my parents? Because going over their finances showed me something about my own career in finance. I had been working at BlackRock for almost 25 years by the time I lost my mom and dad, but the experience reminded me — in a new and very personal way — why my business partners and I founded BlackRock in the first place.

Obviously, we were ambitious entrepreneurs, and we wanted to build a big, successful company. But we also wanted to help people retire like my parents did. That’s why we started an asset manager — a company that helps people invest in the capital markets — because we believed participating in those markets was going to be crucial for people who wanted to retire comfortably and financially secure.

We also believed the capital markets would become a bigger and bigger part of the global economy. If more people could invest in the capital markets, it would create a virtuous economic cycle, fueling growth for companies and countries, which would, in turn, generate wealth for millions more people.

My parents lived their final years with dignity and financial freedom. Most people don’t have that chance. But they can. The same kinds of markets that helped my parents in their time can help others in our time.  Indeed, I think the growth- and prosperity-generating power of the   capital markets will remain a dominant economic trend through the rest of the 21 st  Century.

This letter attempts to explain why.

I had been working at BlackRock for almost 25 years by the time I lost my mom and dad, but the experience reminded me — in a new and very personal way — why my business partners and I founded BlackRock in the first place.

A brief (and admittedly incomplete) history of U.S. capital markets

In finance, there are two basic ways to get or grow money.

One is the bank, which is what most people historically relied on. They deposited their savings to earn interest or took out loans to buy a home or expand their business. But over time a second avenue for financing arose, particularly in the U.S., with the growth of the capital markets: Publicly traded stocks, bonds, and other securities.

I saw this firsthand in the late 1970s and early 1980s when I played a role in the creation of the securitization market for mortgages.

Before the 1970s, most people secured financing for their homes the same way they did in the Christmas classic It’s a Wonderful Life — through the Building & Loan (B&L). Customers deposited their savings into the B&L, which was essentially a bank. Then that bank would turn around and lend out those savings in the form of mortgages.

In the movie — and in real life — everything works fine until people start lining up at the bank’s front door asking for their deposits back. As Jimmy Stewart explained in the film, the bank didn’t have their money. It was tied up in somebody else’s house.

After the Great Depression, B&Ls morphed into savings & loans (S&Ls), which had their own crisis in the 1980s. Approximately half of the outstanding home mortgages in the U.S. were held by S&Ls in 1980, and poor risk management and loose lending practices led to a raft of failures costing U.S. taxpayers more than $100 billion dollars. 2

But the S&L crisis didn’t cause the American economy lasting damage. Why? Because at the same time the S&Ls were collapsing another method of financing was getting stronger. The capital markets were providing an avenue to channel capital back to challenged real estate markets.

This was mortgage securitization.

Securitization allowed banks not just to make mortgages but to sell them. By selling mortgages, banks could better manage risk on their balance sheets and have capital to lend to home buyers, which is why the S&L crisis didn’t severely impact American homeownership. 

Eventually, the excesses of mortgage securitization contributed to the crash in 2008, and unlike the S&L crisis, the Great Recession did harm home ownership in the U.S. The country still hasn’t fully recovered in that respect. But the broader underlying trend — the expansion of the capital markets — was still very helpful for the American economy.

In fact, it’s worth considering: Why did the U.S. rebound from 2008 faster than almost any other developed nation? 3

A big part of the answer is the country’s capital markets .

In Europe, where most assets were kept in banks, economies froze as banks were forced to shrink their balance sheets. Of course, U.S. banks had to tighten capital standards and pull back from lending as well. But because the U.S. had a more robust secondary pool of money – the capital markets — the nation was able to recover much more quickly.

Today public equities and bonds provide over 70% of financing for non-financial corporations in the U.S. – more than any other country in the world. In China, for example, the bank-to-capital market ratio is almost flipped. Chinese companies rely on bank loans for 65% of their financing. 4

In my opinion, this is the most important lesson in recent economic history:  Countries aiming for prosperity don’t just need strong banking systems — they also need strong capital markets.

That lesson is now spreading around the world.

Replicating the success of America’s capital markets

Last year, I spent a lot of days on the road, logging visits to 17 different countries. I met with clients and employees. I also met with many policymakers and heads of state, and during those meetings, the most frequent conversation I had was about the capital markets.

More and more countries recognize the power of American capital markets and want to build their own.

Of course, many countries do have capital markets already. There are something like 80 stock exchanges around the world, everywhere from Kuala Lumpur to Johannesburg. 5  But most of these are rather small, with little investment. They’re not as robust as the markets in the U.S., and that’s what other nations are increasingly looking for.

In Saudi Arabia, for example, the government is interested in building a market for mortgage securitization, while Japan and India want to give people new places to put their savings. Today, in Japan, it’s mostly the bank. In India, it’s often in gold.

When I visited India in November, I met policymakers who lamented their fellow citizens’ fondness for gold. The commodity has underperformed the Indian stock market, proving a subpar investment for individual investors. Nor has investing in gold helped the country’s economy.

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.

This is a small illustration — but a good one — of what countries want to accomplish with robust capital markets. (Or rather, of what they  can’t accomplish without them.)

Despite the anti-capitalist strain in our modern politics, most world leaders still see the obvious: No other force can lift more people from poverty or improve quality of life quite like capitalism. No other economic model can help us achieve our highest hopes for financial freedom — whether we want it for ourselves or our country.

That’s why the capital markets will be key to addressing two of the mid-21 st Century’s biggest economic challenges.

• The first is providing people what my parents built over time — a secure, well-earned retirement. This is a much harder proposition than it was 30 years ago. And it’ll be a much harder proposition 30 years from now . People are living longer lives. They’ll need more money. The capital markets can provide it — so long as governments and companies help people invest.
• A second challenge is infrastructure. How are we going to build the massive amount the world needs? 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.

[Retirement] is a much harder proposition than it was 30 years ago. And it’ll be a much harder proposition 30 years from now .

Asking the old age question: How do we afford longer lives?

Last year, Japan passed a demographic milestone. The country’s population has been aging since the early 1990s as the pool of working-age people has shrunk and the number of elderly has risen. But 2023 was the first time that 10% of their people exceeded 80 years old, 6 making Japan the “oldest country in the world” according to the United Nations. 7

This is part of the reason the Japanese government is making a push for retirement investment.

Most Japanese keep the bulk of their retirement savings in banks, earning a low interest rate. It wasn’t such a bad strategy when Japan was suffering from deflation, but now the country’s economy has turned around, with the NIKKEI surging past 40,000 for the first time this month (March 2024). 8

Most aspiring retirees are missing out on the upswing. The country didn’t have anything resembling a 401(k) program until 2001, but even then, the amount of income people could contribute was quite low. So a decade ago, the government launched the Nippon Individual Savings Accounts (NISA) to encourage people to invest even more in retirement. Now they’re trying to double NISA’s enrollment. The goal is 34 million Japanese investors before the end of the decade. 9 It will require the Japanese government to expand their capital markets, which historically had very little retail participation.

Japan isn’t alone in helping more of its citizens invest for retirement. BlackRock has a joint venture — Jio BlackRock — with Jio Financial Services, an affiliate of India’s Reliance Industries. Over the past 10 years, India has built a huge digital public infrastructure network that connects nearly one billion Indians to everything from healthcare to government payments via their smartphones. Jio BlackRock’s goal is to use the same infrastructure to deliver retirement investing (and more).

After all, India is aging, too. The whole world is, albeit at different speeds. Brazil will start seeing more people leave its workforce than enter it by 2035; Mexico will reach peak workforce by 2040; India sometime around 2050.

As populations age, building retirement savings has never been more urgent

Source: Working-age population (ages 15-64): UN “medium trend 10

By the mid-century mark, one-in-six people globally will be over the age of 65, up from one-in-11 in 2019. 11 To support them, governments are going to have to prioritize building out robust capital markets like the U.S. has.

But this isn’t to say the U.S. retirement system is perfect. I’m not sure anybody believes that. The retirement system in America needs modernizing, at the very least.

Rethinking retirement in the United States

This was particularly clear last year as the biotech industry pumped out a rush of new, life-extending drugs. Obesity, for example, can take more than 10 years off someone’s life expectancy, which is why some researchers think that new pharmaceuticals like Ozempic and Wegovy can be life-extending drugs, not just weight-loss drugs. 12 In fact, a recent study shows that semaglutide, the generic name for Ozempic, can give people with cardiovascular disease an extra two years of life where they don’t suffer a major condition like a heart attack. 13

We focus a tremendous amount of energy on helping people live longer lives. But not even a fraction of that effort is spent helping people afford those extra years.

These drugs are breakthroughs. But they underscore a frustrating irony: As a society, we focus a tremendous amount of energy on helping people live longer lives. But not even a fraction of that effort is spent helping people afford those extra years.

It wasn’t always this way. One reason my parents had a financially secure retirement was CalPERS, California’s state pension system. As a public university employee, my mom could enroll. But pension enrollment has been declining across the country since the 1980s. 14 Meanwhile the federal government has prioritized maintaining entitlement benefits for people my age (I’m 71) even though it might mean that Social Security will struggle to meet its full obligations when younger workers retire.

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.

Maybe once a decade, the U.S. faces a problem so big and urgent that government and corporate leaders stop business as usual. They step out of their silos and sit around the same table to find a solution. I participated in something like this after 2008, when the government needed to find a way to unwind the toxic assets from the mortgage crisis. More recently, tech CEOs and the federal government came together to address the fragility of America’s semiconductor supply chain. We need to do something similar for the retirement crisis. America needs an organized, high-level effort to ensure that future generations can live out their final years with dignity.

What should that national effort do? I don’t have all the answers. But what I do have is some data and the beginnings of a few ideas from BlackRock’s work. Because our core business is retirement.

More than half the assets BlackRock manages are for retirement. 15 We help about 35 million Americans invest for life after work, 16 which amounts to about a quarter of the country’s workers. 17 Many are educators like my mom was. BlackRock helps manage pension assets for roughly half of U.S. public school teachers. 18 And this work — and our similar work around the globe — has given us some insight into how a national initiative to modernize retirement might begin.

We think the conversation starts by looking at the challenge through three different lenses. 

• What’s the issue from the perspective of a current worker , someone who’s still trying to save for retirement?
• What about someone who has already retired? We have to look at the problem from the retiree’s point of view­­­­­­­­­­ — an individual who has already saved enough to stop working but is worried the money will run out.
• But first it’s important to look at retirement in America like you’d look at a map of America — a high-level picture of the problem, the kind a national policymaker might look at. What’s the issue for the population as a whole? (It’s demographics.)

[Young people] 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.

The demographics don’t lie

There’s a popular saying in economics: “You just can’t fight demographics.” And yet, when it comes to retirement, the U.S. is trying anyway.

In wealthy countries, most retirement systems have three pillars. One is what people invest personally (my dad putting his money in the stock market). Another is the plans provided by employers (my mom’s CalPERS pension). A third component is what we hear politicians mostly talking about – the government safety net. In the U.S., this is Social Security.

You’re probably familiar with the economics behind Social Security. During your working years, the government takes a portion of your income, then after you retire, it sends you a check every month. The idea actually originates from pre-World War I Germany, and these “old-age insurance” programs gradually became popular over the 20 th Century largely because the demographics made sense.

Think about someone who was 65 years old in 1952, the year I was born. If he hadn’t retired already, that person was probably getting ready to stop working.

But now think about that person’s former colleagues, all the people around his age who he’d entered the workforce with back in the 1910s. The data shows that in 1952, most of those people were not preparing for retirement because they’d already passed away .

This is how the Social Security program functioned: More than half the people who worked and paid into the system never lived to retire and be paid from the system. 19

Today, these demographics have completely unraveled, and this unraveling is obviously a wonderful thing. We should want more people to live more years. But we can’t overlook the massive impact on the country’s retirement system.

It’s not just that more people are retiring in America; it’s also that their retirements are increasing in length. Today, if you’re married and both you and your spouse are over the age of 65, there’s a 50/50 chance at least one of you will be receiving a Social Security check until you’re 90. 20

All this is putting the U.S. retirement system under immense strain. The Social Security Administration itself says that by 2034, it won’t be able to pay people their full benefits. 21

What’s the solution here? No one should have to work longer than they want to. 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.

Humanity has changed over the past 120 years. So must our conception of retirement.

One nation that’s rethought retirement is the Netherlands. In order to keep their state pension affordable, the Dutch decided more than 10 years ago to gradually raise the retirement age. It will now automatically adjust as the country’s life expectancy changes. 22

Obviously, implementing this policy elsewhere would be a massive political undertaking. But my point is that we should start having the conversation . When people are regularly living past 90, what should the average retirement age be?

Or rather than pushing back when people receive retirement benefits, perhaps there’s a more politically palatable idea: How do we encourage more people who wish to work longer with carrots rather than sticks? What if the government and the private sector treated 60-plus year-olds as late-career workers with much to offer rather than people who should retire?

One way Japan has managed its aging economy is by doing exactly this. They’ve found new ways to boost the labor force participation rate, a metric that has been declining in the U.S. since the early 2000s. 23 It’s worth asking: How can America stop (or at least, slow) that trend?

Again, I’m not pretending to have the answers. Despite BlackRock’s success helping millions retire, these questions are going to have to be posed to a broader range of investors, retirees, policymakers, and others. Over the next few months, BlackRock will be announcing a series of partnerships and initiatives to do just that, and I invite you to join us.

For workers, make investing (almost) automatic

When the U.S. Census Bureau released its regular survey of consumer finances in 2022, nearly half of Americans aged 55 to 65 reported not having a single dollar saved in personal retirement accounts. 24 Nothing in a pension. Zero in an IRA or 401(k).

Why? Well, the first barrier to retirement investing is affordability.

Four-in-10 Americans don’t have $400 to spare to cover an emergency like a car repair or hospital visit. 25 Who is going to invest money for a retirement 30 years away if they don’t have cash for today? No one. That’s why BlackRock’s foundation has worked with a group of nonprofits to set up an Emergency Savings Initiative. The program has helped mostly low-income Americans put away a total of $2 billion in new liquid savings. 26

Studies show that when people have emergency savings, they’re 70% more likely to invest for retirement. 27 But this is where workers run into another barrier: Investing is complex even if you can afford it.

No one is born a natural investor. It’s important to say that because sometimes in the financial services industry we imply the opposite. We make it seem like saving for retirement can be a simple task, something anyone can do with a bit of practice, like driving your car to work. Just grab your keys and hop in the driver’s seat. But financing retirement isn’t so intuitive. The better analogy is if someone dropped a bunch of engine and auto parts in your driveway and said, “Figure it out.”

At BlackRock, we’ve tried to make the investing process more intuitive by inventing simpler products like target date funds. They only require people to make one decision: What year do they expect to retire? Once people choose their “target date,” the fund automatically adjusts their portfolio, shifting from higher-return equities to less risky bonds as retirement approaches. 28

In 2023, BlackRock expanded the types of target date ETFs we offer so people can more easily buy them even if they don’t work for employers offering a retirement plan. There are 57 million people like this in America — farmers, gig workers, restaurant employees, independent contractors — who don’t have access to a defined contribution plan. 29 And while better investment products can help, there are limits to what something like a target date fund can do. Indeed, for most people, the data shows that the hardest part of retirement investing is just getting started.

Other nations make things simpler for their part-time and contract workers. In Australia, employers must contribute a portion of income for every worker between the ages of 18 and 70 into a retirement account, which then belongs to the employee. The Superannuation Guarantee was introduced in 1992 when the country seemed like it was on the path to a retirement crisis. Thirty-two years later, Australians likely have more retirement savings per capita than any other country. The nation has the world’s 54 th largest population, 30 but the 4 th largest retirement system. 31

Of course, every country is different, so every retirement system should be different. But Australia’s experience with Supers could be a good model for American policymakers to study and build on. Some already are. There are about 20 U.S. states — like Colorado and Virginia — that have instituted retirement systems to cover all workers like Australia does, even if they’re gig or part-time. 32

It’s a good thing that legislators are proposing different bills and states are becoming “laboratories of retirement.” More should consider it. The benefits could be enormous for individual retirees. These new programs could also help the U.S. ensure the long-term solvency of Social Security. That’s what Australia found — their Superannuation Guarantee relieved the financial tension in their country’s public pension program. 33

But what about workers who do have access to an employer retirement plan? They need support too.

Even among employees who have access to employer plans, 17% don’t enroll in them, and the hypothesis among retirement experts is this is not a conscious choice. People are just busy.

It sounds trivial, but even the hour or so it takes someone to look through their work email inbox for the correct link to their company’s retirement system, and then select the percentage of their income they want to contribute can be the unclearable hurdle. That’s why companies should make a conscious effort to look at what their default option is. Are people automatically enrolled in a plan or not? And how much are they auto-enrolled to contribute? Is it a minimum percentage of their income? Or the maximum?

In 2017, the University of Chicago economist Richard Thaler won the Nobel Prize, in part, for his pioneering work around “nudges” — small changes in policy that can have enormous impact in people’s financial lives. Auto-enrollment is one of them. Studies show that the simple step of making enrollment automatic increases retirement plan participation by nearly 50%. 34

As a nation, we should do everything we can to make retirement investing more automatic for workers. And there are already bright spots. Next year, a new federal law will kick in, requiring employers that set up new 401(k) plans to auto-enroll their new workers. Plus, there are hundreds of major companies (including BlackRock) that have already taken this step voluntarily.

But firms can do even more to improve their employee’s financial lives, such as providing some level of matching funds for retirement plans and offering more financial education on the tremendous long-term difference between contributing a small percentage of your income to retirement versus the maximum. I also think we should make it easier for workers to transfer their 401(k) savings when they switch jobs. There is a menu of options here, and we need to explore all of them.

For retirees, help them spend what they saved

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. And yet the data also showed that they were anxious about their finances. Only 32% reported feeling comfortable about spending what they saved. 35

This retirement paradox has a simple explanation: Even people who know how to save for retirement still don’t know how to spend for it.

In the U.S., this problem’s roots stretch back more than four decades when employers began switching from defined benefit plans — pensions — to defined contribution plans like 401(k)s.

In a lot of ways, pensions were much simpler than the 401(k). You had a job somewhere for 20 or 30 years. Then when you retired, your pension paid you a set amount — a defined benefit — every month.

When I entered the workforce in the 1970s, 38% of Americans had one of these defined benefit plans, but by 2008 the percentage had been cut almost in half. 36 Meanwhile, the fraction of Americans with defined contribution plans almost quadrupled. 37

This should have been a good thing. Beginning with the Baby Boomers, fewer and fewer workers spent their entire careers in one place, meaning they needed a retirement option that would follow them from job to job. In theory, 401(k)s did that. But in practice? Not really.

Anyone who’s switched jobs knows how unintuitive it is to transfer your retirement savings. In fact, studies show that about 40% of employees cash out their 401(k)s when they switch jobs, putting themselves back at the starting line for retirement savings. 38

The real drawback of defined contribution was that it removed most of the retirement responsibility from employers and put it squarely on the shoulders of the employees themselves. With pensions, companies had a very clear obligation to their workers. Their retirement money was a financial liability on the corporate balance sheet. Companies knew they’d have to write a check every month to each one of their retirees. But defined contribution plans ended that, forcing retirees to trade a steady stream of income for an impossible math problem.

Because most defined contribution accounts don’t come with instructions for how much you can take out every month, individual savers first must build up a nest-egg, then spend down at a rate that will last them the rest of their lives. But who really knows how long that will be?

Put simply, the shift from defined benefit to defined contribution has been, for most people, a shift from financial certainty to financial un certainty .

That’s why around the same time we saw the data that retirees were nervous about spending their savings, we started wondering: Was there something we can do about it? Could we develop an investment strategy that provided the flexibility of a 401(k) investment but also the potential for a predictable, paycheck-like income stream, similar to a pension?

It turns out, we could. That strategy is called LifePath Paycheck™, which will go live in April. As I write this, 14 retirement plan sponsors are planning to make LifePath Paycheck™ available to 500,000 employees. I believe it will one day be the most used investment strategy in defined contribution plans.

We’re talking about a revolution in retirement. And while it may happen in the U.S. first, eventually other countries will benefit from the innovation as well. At least, that is my hope. Because while retirement is mainly a saving challenge, the data is clear: It’s a spending one too.

Fear vs. hope

Before I conclude this section on retirement, I want to share a few words about one of the largest barriers to investing for the future. In my view, it’s not just affordability or complexity or the fact that people are too busy to enroll in their employer’s plan.

Arguably the biggest barrier to investing for retirement — or for anything — is fear.

In finance, we sometimes think of “fear” as a fuzzy, emotional concept — not as a hard economic data point. But that’s what it is. Fear is as important and actionable a metric as GDP. After all, investment (or lack thereof) is just a measure of fear because no one lets their money sit in a stock or a bond for 30 or 40 years if they’re afraid the future is going to be worse than the present. That’s when they put their money in a bank. Or underneath the mattress.

This is what happens in many countries. 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. 39 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. 40

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.

This big, hopeful America has been the one I’ve known my whole life, but over the past few years, especially as I’ve had more grandchildren, I’ve started to ask myself: Will they know this version of America, too?

As I was finishing this letter, The Wall Street Journal published an article that caught my attention. It was titled “The Rough Years that Turned Gen Z into America’s Most Disillusioned Voters,” and it included some eye-catching — and really disheartening — data.

The article showed that from the mid-1990s through most of the early 21 st Century, most young people — around 60% of high school seniors, to be specific — believed they’d earn a professional degree, would land a good job, and go on to be wealthier than their parents. They were optimistic. But since the pandemic, that optimism has fallen precipitously.

Compared with 20 years ago, the current cohort of young Americans is 50% more likely to question whether life has a purpose. Four-in-10 say it’s “hard to have hope for the world.” 41

I’ve been working in finance for almost 50 years. I’ve seen a lot of numbers. But no single data point has ever concerned me more than this one.

The lack of hope worries me as a CEO. It worries me as a grandfather. But most of all, it worries me as an American.

If future generations don’t feel hopeful about this country and their future in it, then the U.S. doesn’t only lose the force that makes people want to invest. America will lose what makes it America. Without hope, we risk becoming just another place where people look at the incentive structure before them and decide that the safe choice is the only choice. We risk becoming a country where people keep their money under the mattress and their dreams bottled up in their bedroom.

How do we get our hope back?

Whether we’re trying to solve retirement or any other problem, that is the first question we have to ask, although I readily admit that I do not have the solution. I look at the state of America — and the world — and I am as answerless as everyone else. There’s so much anger and division, and I often struggle to wrap my head around it.

What I do know is that any answer has to start by bringing young people into the fold. The same surveys that show their lack of hope also show their lack of confidence — far less than any previous generation — in every pillar of society: In politics, government, the media, and in corporations. Leaders of these institutions (I am one) should be empathetic to their concerns.

Young people have lost trust in older generations. The burden is on us to get it back. And maybe investing for their long-term goals, including retirement, isn’t such a bad place to begin.

Perhaps the best way to start building hope is by telling young people, “You may not feel very hopeful about your future. But we do. And we’re going to help you invest in it.”

Young people have lost trust in older generations. The burden is on us to get it back. And maybe investing for their long-term goals, including retirement, isn’t such a bad place to begin.

The new infrastructure blueprint: Steel, concrete, and public-private partnership

I started traveling to London in the 1980s, and back then, if you had a choice between the city’s two major international airports — Heathrow or Gatwick — you probably chose Heathrow. Gatwick was farther from the city. It was also in a comparative state of disrepair.

But things changed in 2009 when Gatwick was purchased by Global Infrastructure Partners (GIP). They increased runway capacity and instituted commonsense changes, like oversized luggage trays that cut security screening times by more than half.

“The thing about infrastructure businesses... is a lot of them tend not to focus on customer service,” GIP’s CEO Bayo Ogunlesi told the Financial Times . GIP wanted to make Gatwick different. In the process, they also turned the airport into a prime example of how infrastructure will be built and run in the 21 st Century — with private capital. 42

In the U.S., people tend to think of infrastructure as a government endeavor, something built with taxpayer funds. But because of one very big reason that I’ll dive into momentarily, that won’t be the primary way infrastructure is built in the mid-21 st Century. Rather than only tapping government treasuries to build bridges, power grids, and airports, the world will do what Gatwick did.

The future of infrastructure is public-private partnership.

Debt matters

The $1 trillion infrastructure sector is one of the fastest growing segments of the private markets, and there are some undeniable macroeconomic trends driving this growth. In developing countries, people are getting richer, boosting demand for everything from energy to transportation while in wealthy countries, governments need to both build new infrastructure and repair the old.

Even in the U.S., where the Biden Administration has signed generational infrastructure investments into law, there’s still $2 trillion worth of deferred maintenance. 43

How will we pay for all this infrastructure? The reason I believe it’ll have to be some combination of public and private dollars is that funding probably cannot come from the government alone. The debt is just too high.

From Italy to South Africa, many nations are suffering the highest debt burdens in their history. Public debt has tripled since the mid-1970s, reaching 92% of global GDP in 2022. 44 And in America, the situation is more urgent than I can ever remember. Since the start of the pandemic, the U.S. has issued roughly $11.1 trillion of new debt, and the amount is only part of the issue. 45 There’s also the interest rate the Treasury needs to pay on it.

Three years ago, the rate on a 10-year Treasury bill was under 1%. But as I write this, it’s over 4%, and that 3-percentage-point increase is very dangerous. Should the current rates hold, it amounts to an extra trillion dollars in interest payments over the next decade. 46

Why is this debt a problem now? Because historically, America has paid for old debt by issuing new debt in the form of Treasury securities. It’s a workable strategy so long as people want to buy those securities — but going forward, the U.S. cannot take for granted that investors will want to buy them in such volume or at the premium they currently do.

Today, around 30% of U.S. Treasury securities are held by foreign governments or investors. That percentage will likely go down as more countries build their own capital markets and invest domestically. 47

More leaders should pay attention to America’s snowballing debt. There’s a bad scenario where the American economy starts looking like Japan’s in the late 1990s and early 2000s, when debt exceeded GDP and led to periods of austerity and stagnation. A high-debt America would also be one where it’s much harder to fight inflation since monetary policymakers could not raise rates without dramatically adding to an already unsustainable debt-servicing bill.

But is a debt crisis inevitable? No.

While fiscal discipline can help tame debt on the margins, it will be very difficult (both politically and mathematically) to raise taxes or cut spending at the level America would need to dramatically reduce the debt. But there is another way out beyond taxing or cutting, and that’s growth. If U.S. GDP grows at an average of 3% (in real, not nominal terms) over the next five years, that would keep the country’s debt-to-GDP ratio at 120% – high, but reasonable.

I should be clear: 3% growth is a very tall order, especially given the country’s aging workforce. It will require policymakers to shift their focus. We can’t see debt as a problem that can be solved only through taxing and spending cuts anymore. Instead, America’s debt efforts have to center around pro-growth policies , which include tapping the capital markets to build one of the best catalysts for growth: Infrastructure. Especially energy infrastructure.

Energy pragmatism

Roads. Bridges. Ports. Airports. Cell towers. The infrastructure sector contains multitudes, but the multitude where BlackRock sees arguably the greatest demand for new investment is energy infrastructure.

Why energy? Two things are happening in the sector at the same time.

The first is the “energy transition.” It’s a mega force, a major economic trend being driven by nations representing 90% of the world’s GDP. 48 With wind and solar power now cheaper in many places than fossil-fuel-generated electricity, these countries are increasingly installing renewables. 49 It’s also a major way to address climate change. This shift – or energy transition – has created a ripple effect in the markets, creating both risks and opportunities for investors, including BlackRock’s clients.

I started writing about the transition in 2020. Since then, the issue has become more contentious in the U.S. But outside the debate, much is still the same. People are still investing heavily in decarbonization. In Europe, for example, net-zero remains a top investment priority for most of BlackRock’s clients. 50 But now the demand for clean energy is being amplified by something else: A focus on energy security.

Governments have been pursuing energy security since the oil crisis of the 1970s, (and probably as far back as the early Industrial Revolution), so this is not a new trend. In fact, when I wrote my original 2020 letter about sustainability, I also wrote to our clients that countries would still need to produce oil and gas to meet their energy needs. 

To be energy secure, I wrote, most parts of the globe would need “to rely on hydrocarbons for a number of years.” 51

I’m hearing more leaders talk about decarbonization and energy security together under the joint banner of what you might call “energy pragmatism.”

Then in 2022, Putin invaded Ukraine. The war lit a fresh spark under the idea of energy security. It disrupted the world’s supply of oil and gas causing massive energy inflation, particularly in Europe. The UK, Norway, and the 27 EU countries had to collectively spend 800 billion euros subsidizing energy bills. 52

This is part of the reason I’m hearing more leaders talk about decarbonization and energy security together under the joint banner of what you might call “energy pragmatism.”

Last year, as I mentioned, I visited 17 countries, and I spent a lot of time talking to the people who are responsible for powering homes and businesses, everybody from prime ministers to energy grid operators. The message I heard was completely opposite to what you often hear from activists on the far left and right who say that countries have to choose between renewables and oil and gas. These leaders believe that the world still needs both. They were far more pragmatic about energy than dogmatic. Even the most climate conscious among them saw that their long-term path to decarbonization will include hydrocarbons, albeit less of them, for some time to come.

Germany is a good example of how energy pragmatism is still a path to decarbonization. It’s one of the countries most committed to fighting climate change and has made enormous investments in wind and solar power. But sometimes the wind doesn’t blow in Berlin, and the sun doesn’t shine in Munich. And during those windless, sunless periods, the country still needs to rely on natural gas for “dispatchable power.” Germany used to get that gas from Russia, but now it needs to look elsewhere. So, they’re building additional gas facilities to import from other producers around the world. 53

Or look at Texas. They face a similar energy challenge – not because of Russia but because of the economy. The state is one of the fastest growing in the U.S., 54 and the additional demand for power is stretching ERCOT, Texas’ energy grid, to the limit. 55

Today, Texas runs on 28% renewable energy 56 – 6% more than the U.S. as a whole. 57 But without an additional 10 gigawatts of dispatchable power, which might need to come partially from natural gas, the state could continue to suffer devastating brownouts. In February, BlackRock helped convene a summit of investors and policymakers in Houston to help find a solution.

Texas and Germany are great illustrations of what the energy transition looks like. As I wrote in 2020, the transition will only succeed if it’s “fair.” Nobody will support decarbonization if it means giving up heating their home in the winter or cooling it in the summer. Or if the cost of doing so is prohibitive.

Since 2020, economists have popularized better language to describe what a fair transition actually means. One important concept is the “green premium.” It’s the surcharge people pay for “going green”: for example, switching from a car that runs on gas to an electric vehicle. The lower the green premium, the fairer decarbonization will be because it’ll be more affordable.

This is where the power of the capital markets can be unleashed to great effect. Private investment can help energy companies reduce the cost of their innovations and scale them around the world. Last year, BlackRock invested in over a dozen of these transition projects on behalf of our clients. We partnered with developers in Southeast Asia aiming to build over a gigawatt of solar capacity (enough to power a city) in both Thailand and the Philippines. 58 We also invested in Lake Turkana Wind Power, Africa’s largest windfarm. It’s located in Kenya and currently accounts for about 12% of the country’s power generation. 59

There are also earlier-stage technologies, like a giant “hot rock” battery being built by Antora Energy. The company heats up blocks of carbon with wind or solar power during parts of the day when renewable energy is cheap and abundant. These “thermal batteries” reach up to 2,400 degrees Celsius and glow brighter than the sun. 60 Then, that heat is used to power giant industrial facilities around-the-clock, even when the sun isn’t shining, or the wind isn’t blowing.

BlackRock invested in Antora through Decarbonization Partners, a partnership we have with the investment firm, Temasek. Our funding will help Antora scale up to deliver billions of dollars worth of zero-emission energy to industrial customers. 61 (One day, their thermal batteries might help solve the kind of dispatchable power problem that Texas and Germany are facing – but without carbon emissions.)

The final technology I’ll spotlight is carbon capture. Last year, one of BlackRock’s infrastructure funds invested $550 million in a project called STRATOS, which will be the world’s largest direct air capture facility when construction is completed in 2025. 62 Among the more interesting aspects of the project is who’s building the facility: Occidental Petroleum, the big Texas oil company.

The energy market isn’t divided the way some people think, with a hard split between oil & gas producers on one side and new clean power and climate tech firms on the other. Many companies, like Occidental, do both, which is a major reason BlackRock has never supported divesting from traditional energy firms. They’re pioneers of decarbonization, too.

Today, BlackRock has more than $300 billion invested in traditional energy firms on behalf of our clients. Of that $300 billion, more than half – $170 billion – is in the U.S. 63 We invest in these energy companies for one simple reason: It’s our clients’ money. If they want to invest in hydrocarbons, we give them every opportunity to do it – the same way we invest roughly $138 billion in energy transition strategies for our clients. That’s part of being an asset manager. We follow our clients’ mandates.

But when it comes to energy, I also understand why people have different preferences in the first place. Decarbonization and energy security are the two macroeconomic trends driving the demand for more energy infrastructure. Sometimes they’re competing trends. Other times, they’re complementary, like when the same advanced battery that decarbonizes your grid can also reduce your dependence on foreign power.

The point is: The energy transition is not proceeding in a straight line. As I’ve written many times before, it’s moving in different ways and at different paces in different parts of the world. At BlackRock, our job is to help our clients navigate the big shifts in the energy market no matter where they are.

BlackRock’s next transformation

One way we’re helping our clients navigate the booming infrastructure market is by transforming our company. I began this section by writing about the owners of Gatwick Airport, GIP. In January, BlackRock announced our plans to acquire them. 

Why GIP? BlackRock’s own infrastructure business had been growing rapidly over the past several years. But to meet demand, we realized we needed to grow even faster.

It’s not just debt-strapped governments that need to find alternate pools of financing for their infrastructure. Private sector firms do too. All over the world, there’s a vast infrastructure footprint that’s owned and operated entirely by private companies. Cell towers are a good example. So are pipelines that deliver the feedstocks for chemical companies. Increasingly, the owners of these assets prefer to have a financing partner, rather than carrying the full cost for the infrastructure on their balance sheet.

I had been thinking about this trend and called an old colleague, Bayo Ogunlesi.

Both Bayo and I started our careers in finance at the investment bank First Boston. But our paths diverged. 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. Meanwhile, Bayo and his team were pioneering modern infrastructure investing in the private markets.

Now, we plan to join our forces again. I think the result will be better opportunities for our clients to invest in the infrastructure that keeps our lights on, planes flying, trains moving, and our cell service at the maximum number of bars.

More about BlackRock’s work in 2023

In this letter, I’ve shared my view that the capital markets are going to play an even bigger role in the global economy. They’ll have to if the world wants to address the challenges around infrastructure, debt, and retirement. These are the major economic issues of the mid-21st Century. We’re going to need the power of capitalism to solve them.

The way BlackRock figures into that story is through our work with clients. We want to position them well to navigate these trends, which is why we’ve tried to stay more connected to our clients than ever.

Over the past five years, thousands of clients on behalf of millions of individuals have entrusted BlackRock with managing over $1.9 trillion in net new assets. Thousands also use our technology to better understand the risks in their portfolios and support the growth and commercial agility of their own businesses. Years of organic growth, alongside the long-term growth of the capital markets, underpin our $10 trillion of client assets, which grew by over $1.4 trillion in 2023.

In good times and bad, whether clients are focused on increasing or decreasing risk, our consistent industry-leading organic growth demonstrates that clients are consolidating more of their portfolios with BlackRock. In 2023, our clients awarded us with $289 billion in net new assets during a period of rapid change and significant portfolio de-risking.

BlackRock’s differentiated business model has enabled us to continue to grow with our clients and maintain positive organic base fee growth. We’ve grown regardless of the market backdrop and even as most of the industry experienced outflows.

I think back to 2016 and 2018 when uncertainty and cautious sentiment impacted investment behavior among institutions and individuals. Many clients de-risked and moved to cash. BlackRock stayed connected with our clients. We stayed rigorous in driving investment performance, innovating new products and technologies, and providing advice on portfolio design. Once clients were ready to step back into the markets more actively, they did it with BlackRock – leading to new records for client flows, and organic base fee growth at or above our target.

Flows and organic base fee growth accelerated into the end of 2023. We saw $96 billion of total net inflows in the fourth quarter and we entered 2024 with great momentum.

In 2024, I plan to do what I did in 2023 – spend a lot of time on the road visiting clients. I’ve already taken several trips in the U.S. and around the world, and it’s clearer than ever that companies and clients want to work with BlackRock.

For companies where we are investing on behalf of our clients, they appreciate that we typically provide long-term, consistent capital. We often invest early, and we stay invested through cycles whether it’s debt or equity, pre-IPO or post-IPO. Companies recognize BlackRock’s global relationships, brand, and expertise across markets and industries. This makes us a valuable partner, and in turn supports the sourcing and performance we can provide for clients.

Over the past 18 months, we’ve sourced and executed on a number of deals for clients. In addition to the STRATOS direct air capture project, our funds partnered with AT&T on the Gigapower JV to build out broadband in communities across the U.S. We also made investments globally, including in Brasol (Brazil), AirFirst (South Korea), Akaysha Energy (Australia), and the Lake Turkana Wind Farm (Kenya).

Our ability to source deals for clients is a primary driver of demand for BlackRock private markets strategies. These strategies saw $14 billion of net inflows in 2023, driven by infrastructure and private credit. We continue to expect these categories to be our primary growth drivers within alternatives in the coming years.

Our active investment insights, expertise and strong investment performance similarly differentiate BlackRock in the market. We saw nearly $60 billion of active net inflows in 2023, compared with industry outflows.

In ETFs, BlackRock generated an industry-leading $186 billion of net inflows in 2023. Our leadership in the ETF industry is another testament to our global platform and connectivity with clients.

What we have seen in market after market is that if we can make investing easier and more affordable, we can quickly attract new clients. We are leveraging digital wealth platforms in local markets to provide more investment access and accelerate organic growth for iShares ETFs.

In EMEA, BlackRock powers ETF savings plans for end investors, partnering with many banks and brokerage platforms, including Trade Republic, Scalable Capital, ING, Lloyds, and Nordnet. These partnerships will help millions of people access investments, invest for the long-term, and achieve financial well-being.

In 2023, we also announced our minority investment in Upvest, which will help drive innovation in how Europeans access markets and make it cheaper and simpler to start investing.

Then there is our work with Britain’s leading digital bank, Monzo, to offer its customers our products through its app, with minimum investments as low as £1. Through these relationships, we’re evolving our iShares ETF franchise to meaningfully increase access to global markets.

Let me also say a few words about Aladdin. It remains the language of portfolios, uniting all of BlackRock, and providing the technological foundation for how we serve clients across our platform. And Aladdin isn’t just the key technology that powers BlackRock; it also powers many of our clients. The need for integrated data and risk analytics as well as whole portfolio views across public and private markets is driving annual contract value (ACV) growth.

In 2023, we generated $1.5 billion in technology services revenue. Clients are looking to grow and expand with Aladdin, reflected in strong harvesting activity, with over 50% of Aladdin sales being multi-product.

As we look ahead, the re-risking of client portfolios will create tremendous prospects for both our public and private markets franchises. And integrated technology will be needed to help clients be nimble while operating at scale.

These are the times where investors are making broad changes to the way they build portfolios. BlackRock is helping investors build the “portfolio of the future” – one that integrates public and private markets and is digitally enabled. We view these changes as big catalysts. With the diversified investment and technology platform we’ve built, we’ve set ourselves up to be a structural grower in the years ahead.

Positioning our organization for the future

Just as we continually innovate and evolve our business to stay ahead of our clients, we also evolve our organization and our leadership team.

Earlier this year we announced changes to reimagine our business and transform our organization to better anticipate what clients need – and shape BlackRock so clients can continue to get the insights, solutions, and outcomes they expect from us.

For years, BlackRock has worked with clients across the whole portfolio, albeit with distinctions between product structures for ETFs, active mutual funds, and separate accounts.

Now the traditional lines between products are blurring. Clients are building portfolios that seamlessly combine both active and index strategies, including liquid and illiquid assets and spanning public and private markets, across ETF, mutual fund, and separate account structures.

BlackRock has been critical in expanding the market for ETFs by making them accessible to more investors and delivering new asset classes (like bonds) and investment strategies (like active). As a result of that success, the ETF is no longer just an indexing concept – it is becoming an efficient structure for a range of investment solutions.

We always viewed ETFs as a technology, a technology that facilitated investing. And just as our Aladdin technology has become core to asset management, so too have ETFs. That’s why we believe embedding our ETF and Index expertise across the entire firm will accelerate the growth of iShares and every investment strategy at BlackRock.

We’ll be nimbler and more closely aligned with clients through our new architecture with the aim of delivering a better experience, better performance, and better outcomes.

Voting choice

Healthy capital markets depend on a continuous feedback loop between companies and their investors. For more than a decade, BlackRock endeavored to improve that feedback loop for our clients.

We’ve done it by building an industry-leading stewardship program, one that’s focused on engaging investee companies on issues impacting our clients’ long-term economic interests. This requires understanding how companies are positioned to navigate the risks and opportunities they face – for example, how geopolitical fragmentation might rewire their supply chains or how higher borrowing cost might impact their capacity to deliver sustained earnings growth.

To do that, we built one of the largest stewardship teams to engage with companies, often alongside our investment teams, because we never believed in the industry’s reliance on the recommendations of a few proxy advisors. We knew our clients would expect us to make independent proxy voting decisions, informed by our ongoing dialogue with companies – a philosophy that continues to underpin our stewardship efforts today. For our clients who have entrusted us with this important responsibility, we remain steadfast in promoting sound corporate governance practices and financial resilience at investee companies on their behalf.

And for our clients who wish to take a more direct role in the proxy voting process, we continue to innovate to provide them with more choice. In 2022, BlackRock was the first in our industry to launch Voting Choice, a capability that enabled institutional investors to participate in the proxy voting process. Today, about half of our clients’ index equity assets under management can access Voting Choice. And in February, we launched a pilot in our largest core S&P 500 ETF, enabling Voting Choice for individual investors for the first time.

We welcome these additional voices to corporate governance and believe they can further strengthen shareholder democracy. I believe that more asset owners can participate in this important process effectively if they are well-informed. We are encouraged by their engagement and the continued transformation of the proxy voting ecosystem but continue to believe that the industry would benefit from additional proxy advisors.

Strategy for long-term growth

For 36 years, BlackRock has led by listening to our clients and evolving to help them achieve long-term outcomes. That commitment has been behind everything we’ve done as a firm, whether it’s unlocking new markets through iShares, pioneering whole portfolio advisory, launching Aladdin on the desktops of investors and so much more. Clients have been at the foundation of our mindset and our growth strategy, informing the investments we’ve made across our businesses.

The combination of technology and advisory, alongside ETFs, active and private markets capabilities, enables us to deliver a better client experience – leading to clients consolidating more of their portfolios with BlackRock or engaging us for outsourcing solutions. We believe this in turn will drive continued differentiated organic growth into the future.

As we do each year, our management team and Board spent time assessing our strategy for growth. We challenge ourselves to think: What opportunities will this economic environment create for BlackRock and our clients, what more can we do to meet and anticipate their needs? How can we evolve our organization, operating structure, investment capabilities, and service models and, in doing so, keep leading the industry?

We have strong conviction in our strategy and our ability to execute with scale and expense discipline. Our strategy remains centered on growing Aladdin, ETFs, and private markets, keeping alpha at the heart of BlackRock, leading in sustainable investing, and advising clients on their whole portfolio.

We have continually made internal investments for organic growth and efficiency, investing ahead of client opportunities in private markets, ETFs, technology, and whole portfolio solutions.

In private markets, we are prepared to capitalize on structural growth trends. Whether it’s executing on demand for much-needed infrastructure, or the growing role of private credit as banks and public lenders move away from the middle market, private capital will be essential. BlackRock is poised to capture share through our scale, proprietary origination, and track record. And we believe our planned acquisition of GIP will meaningfully accelerate our ability to offer our private markets capabilities to our clients.

In ETFs, we will continue to lead by expanding investment access globally and through innovation. The ETF is an adaptable piece of financial technology, and over time we’ve been able to do more with it than just making investing more affordable. We’ve been able to bring better liquidity and price discovery to more opaque markets. One recent example is offering people exposure to Bitcoin through ETFs.

ETFs have been an incredible growth story in the U.S., with iShares leading the way. We believe global ETF adoption is set to accelerate as catalyst trends that we saw in the U.S. years ago like the growth of fee-based advisory and model portfolios are just beginning to take root. Nearly half of 2023 iShares net inflows were from our ETFs listed internationally in local markets, led by European iShares net inflows of $70 billion.

Active asset allocation, security selection and risk management have consistently been key elements in long-term returns. Our active teams across multi-asset, fixed income and equities are well-positioned to seize on broad opportunities arising out of this new interest rate and potentially more volatile regime. We are particularly excited about the opportunity in fixed income and how artificial intelligence is propelling performance in our systematic investing businesses.

Fixed income is going to be increasingly relevant in the construction of whole portfolios with higher yields and better return potential compared to the low-rate environment of the last 15 years. Now that the rate on 10-year U.S. Treasuries is near long-term averages, clients are reconsidering bond allocations.

BlackRock is well-positioned with a diversified fixed income platform. It’s not going to be just about index, where we manage nearly $1.7 trillion. Or just about active where we manage over $1 trillion. Some of the most interesting portfolio conversations are with allocators who are blending ETFs with active or using innovations like our active ETFs for professionally managed income solutions.

Across asset classes, the need for integrated data, technology and risk management will continue to drive demand for Aladdin. Through its dynamic ecosystem of over 130,000 users, the Aladdin platform is constantly innovating and being improved. Investments in Aladdin AI copilots, enhancements in openness supporting ecosystem partnerships, and advancing whole portfolio solutions are going to further augment the value of Aladdin.

We are honored that our clients entrusted us with $289 billion of net new assets in 2023. And over the past few months, we’ve seen a decidedly more positive sentiment and tone in markets and among clients that I'm very optimistic will carry into the rest of 2024.

Our ability to adapt, evolve, and grow has generated a total return of 9,000% for our shareholders since our IPO in 1999. That is well in excess of the S&P 500 return of 490% and representative of a business model serving all our stakeholders.

Total return since BlackRock’s IPO through December 31, 2023

S&P Global. The performance graph is not necessarily indicative of future investment performance.

Our Board of Directors

BlackRock’s Board plays an integral role in our strategy, our growth and our success.

The diverse experiences and backgrounds of our Directors enable us to have rich discussions and debates. At each meeting, our Directors review components of our long-term strategy and foster constructive dialogue with our leadership team on strategic opportunities, priorities and risks facing BlackRock’s business. This dialogue ultimately pushes us to make the sometimes tactical and sometimes transformational moves to build a better BlackRock. This includes the two transformational moves we made in January: The strategic re-architecture of our organization and our agreement to acquire GIP.

These two transformational changes are the largest since our acquisition of Barclays Global Investors nearly 15 years ago.

Following the closing of the GIP transaction, we plan to have Bayo Ogunlesi join our Board of Directors. We will continue to evolve our Board over time to reflect the breadth of our global business and to guide us as we evolve ahead of our clients’ needs.

A final note

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.

It’s part of the same story that includes my parents retiring comfortably after 50 years of hard work. The same story where America was able to endure the 1980s S&L crisis and 2008 financial crisis – and rebound quickly and with growing strength.

And it’s the story that, hopefully, will include more people around the world. Nations that can outgrow their debt. Cities that can afford to power more homes and build more roads. Workers who can live out their golden years with dignity.

All of these stories are only possible because of the power of the capital markets and the people who are hopeful enough to invest in them.

Laurence Fink Chairman and Chief Executive Officer

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1 Based on a $1,000 investment from January 1960 to December 1990. Assumes reinvestment of all dividends. Past performance is not indicative of future results.

2 Federal Reserve History , Savings and Loan Crisis

3 OCED Economic Surveys: United States (2016)

4 Securities Industry and Financial Markets Association , Capital DMarkets Fact Book (2023), p.6

5 World Federation of Exchanges , Market Statistics-February 2024, (2024)

6 World Economic Forum , Ageing and Longevity, (2023)

7 United Nations , World Population Ageing, (2017), p.8

8 The Wall Street Journal , Japan’s Nikkei Tops 40000 for First Time, Driven by AI Optimism, ( 2024)

9 Cabinet Secretariat of Japan , Doubling Asset-based Income Plan, ( 2022), p.2

10 Note: 1. Format adapted from Adele M. Hayutin, New Landscapes of Population Change: A Demographic World Tour (Hoover Press, 2022). Data from United Nations Population Division, World Population Prospects. (latest refresh 2022), Medium Fertility Projection. 2. Peak year is defined as the year in which working age population reaches its maximum for a country. Sources: United Nations Population Statistics (as of 2022). OECD (as of 06/2023). World Bank (as of 2022).

11 United Nations , UN DESA releases new report on ageing , (2019)

12 The New York Times Magazine , Can We Live to 200? ( 2021)

13 National Library of Medicine , Estimated Life-Years Gained Free of New or Recurrent Major Cardiovascular Events With the Addition of Semaglutide to Standard of Care in People With Type 2 Diabetes and High Cardiovascular Risk, ( 2022)

14 Source 1: Bureau of Labor Statistics , Employee Benefits in the United States , (2023), p.1; Source 2: Bureau of Labor Statistics , Employee Benefits in Industry , (1980), p. 6

15 BLK Estimates based on AUM as of December 31 st , 2021 and Cerulli data as of 2020. ETF assets include only qualified assets based on Cerulli data, and assumes 9.5% of institutionally held ETFs are related to pensions or retirement. Institutional estimates includes assets defined as “related to retirement” and are based on products and clients with a specific retirement mandate (e.g., LifePath, pensions). Estimates for LatAm based on assets managed for LatAm Pension Fund clients, excluding cash.

16 BlackRock as of Dec. 31, 2021. The overall number of Americans is calculated based on estimates of participants in BlackRock’s Defined Contribution and Defined Benefit plan clients. The Defined Contribution number is estimated based on data from FERS as well as ISS Market Intelligence BrightScope for active participants across 401(k) and 403(b). Defined Contribution includes plans with over $100M+ in assets where participants have access to one or more BlackRock funds; some may not be invested with BlackRock. The Defined Benefit number is estimated based on data from public filings and Pension & Investments for the total number of participants across the 20 largest U.S. Defined Benefit plans that are not also Defined Contribution clients of BlackRock.

17 U.S. Bureau of Labor Statistics , Labor Force Statistics from the Current Population Survey, (Feb. 2023)

18 Represents the total number of active public schoolteachers enrolled in defined benefit plans with assets managed by BlackRock. Excludes Virginia, Alaska and Pennsylvania pension clients, as the states’ DB plan is not the default plan for its participants. Public school teachers count from the National Center for Education Statistics, projection for 2022 school year. Pensions participation rate based on data from the U.S. Bureau of Labor Statistics: 89% as of March 2022.

19 Social Security , Life Tables for the United States Social Security Area 1900-2100, Figure 3a

20 Social Security , When to Start Receiving Retirement Benefits, (2023), p.2

21 Social Security , Summary: Actuarial Status of the Social Security Trust Funds, (2023)

22 Dutch Government , Why is the state pension age increasing? (translated from Dutch)

23 U.S. Bureau of Labor Statistics , Civilian labor force participation rate, (2000-2024)

24 U.S. Census Bureau , Survey of Income and Program Participation (SIPP) , (2022)

25 Federal Reserve , Economic Well-Being of U.S. Households in 2022, (2023), p.2

26 BlackRock , Emergency Saving Initiative: Impact and Learnings Report, (2019-2022), p.2

27 BlackRock, Emergency Savings Initiative: Impact and Learnings Report, ( 2019-2022), p.12

28 BlackRock , What are target date funds?

29 AARP, New AARP Research: Nearly Half of Americans Do Not Have Access to Retirement Plans at Work, (2022)

30 CIA: The World Factbook , Country Comparisons: Population (2023 est.)

31 OECD , Pensions at a Glance 2023 , (2023), 222

32 Georgetown University Center for Retirement Initiatives , State-Facilitated Retirement Savings Programs: A Snapshot of Program Design Features, (2023)

33 Parliament of Australia , Superannuation and retirement incomes

34 Human Interest , The power of 401(k) automatic enrollment, (2024)

35 BlackRock , To spend or not to spend? (2023), p. 2-5

36 Source 1: The Wall Street Journal, The Champions of the 401(k) Lament the Revolution They Started, (2017); Source 2: Social Security Office of Retirement and Disability Policy, The Disappearing Defined Benefit Pension and Its Potential Impact on the Retirement Incomes of Baby Boomers , (2009)

37 U.S. Chamber of Commerce , Statement of the U.S. Chamber of Commerce, (2012), p. 3

38 Harvard Business Review , Too Many Employees Cash Out Their 401(k)s When Leaving a Job, ( 2023)

39 The Wall Street Journal , Why China’s Middle Class Is Losing Its Confidence, (2024)

40   The Wall Street Journal , Covid-Era Savings are Crucial to China’s Economic Recovery , (2023)

41 The Wall Street Journal , The Rough Years That Turned Gen Z Into America’s Most Disillusioned Voters , (2024)

42 Financial Times , How Adebayo Ogunlesi’s contrarian bet led to $12.5bn BlackRock tie-up , (2024)

43 American Society of Civil Engineers (ASCE ), 2021 Report Card For America’s Infrastructure, (2021), p. 5

44 International Monetary Fund , Global Debt Is Returning to its Rising Trend, (2023)

45 Fiscal Data: U.S. Treasury , Debt to the Penny, ( Debt was $23.4T in March 2020 and $34.5T in March 2024)

46 The Wall Street Journal , A $1 Trillion Conundrum: The U.S. Government’s Mounting Debt Bill, ( 2024)

47 US Department of Treasury , Table 5: Major Foreign Holders of Treasury Securities

48 As of March 2024. Net Zero Tracker, https://zerotracker.net (last visited March 18 th , 2024)

49 Associated Press News , The year in clean energy: Wind, solar and batteries grow despite economic challenges, (2023)

50 BlackRock iResearch Services global survey, sample size n=200, May-June 2023. Survey covered institutional investors’ attitudes, approaches, barriers, and opportunities regarding transition investing. 83% of EMEA respondents surveyed have net zero by 2050 or other date as a transition objective across their portfolio. https://www.blackrock.com/corporate/literature/brochure/global-transition-investing-survey.pdf

51 BlackRock’s 2020 Letter to Clients , Sustainability as BlackRock’s New Standard for Investing, (2020)

52 Reuters , Europe’s spend on energy crisis nears 800 billion euros, (2023)

53 The New York Times , Germany Announces New L.N.G. Facility, Calling It a Green Move from Russian Energy, (2022)

54 Texas Fall 2023 Economic Forecast

55 Federal Reserve Bank of Dallas, Texas electrical grid remains vulnerable to extreme weather events, (2023)

56 U.S. Energy Information Administration : Electricity Data Browser

57 U.S. Energy Information Administration , Solar and wind to lead growth of U.S. power generation for the next two years, (2024)

58 BlackRock Alternatives, CFP, 2023

59 Kenya Power , Annual Report & Financial Statements, (2022)

60 Reuters , BlackRock, Temasek-led group invest $150 mln in thermal battery maker Antora, (2024)

61 Business Wire , Antora Energy Raises $150 Million to Slash Industrial Emissions and Spur U.S. Manufacturing, ( 2024)

62 Oxy, Occidental and BlackRock Form Joint Venture to Develop STRATOS, the World’s Largest Direct Air Capture Plant, (2023)

63 As of June 30, 2022. “Energy companies” refers to corporations classified as belonging to the GICS-1 Energy Sector.

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