[매부리] 51-year-old retirement dreams… I invest half my salary for 20 years.

“For today’s happiness, I enjoy the current consumption.” VS “I want to make money so hard to retire early”

It was found that 2030 generations, aka MZ generations, prefer the’Fire family’, who retire early through sufficient asset formation, rather than the’Yolo’ who enjoys current consumption. They want to retire at age 51, and their target asset is 1.37 billion won. So, how much can I save and how much to retire in my 50s?

NH Investment & Securities Research Institute for the Age of 100 years conducted an online survey on 2,536 people aged 25 to 39 for two days last month.

67.4% of respondents said they were’fire tribes’. Only 32.6% said they were Yolo.

YOLO means the attitude that values ​​and consumes one’s own happiness the most. So, we focus on consumption, saying,’I live only today’. However, the Fire people are those who achieve economic independence at an early age and realize early retirement. He is a person who wants to live the life he wants by earning money as soon as possible and achieving financial independence, then retiring early.

Rather than living up and down today, 2030 generations thought they would retire as soon as possible through diligent financial technology.

Among the respondents, those who said they would retire early cited 51 as their preferred retirement age. The’fire tribes’ who hope for early retirement answered that their target asset is 1.37 billion won. On the other hand, those who do not hope for early retirement answered that they needed 1.25 billion won.

Fires often use the ’25 rule’ when setting the necessary living funds and their target assets. For example, if you spend 40 million won in living expenses for one year, you have to collect 1 billion won (40 million * 25 = 1 billion won). The ’25 rule’ is a calculation that only 4% of living expenses are used every year, taking into account the inflation rate, etc., assuming that investments in real estate or stocks generate steady average annual returns of 5-6%.

Then, calculating the target retirement assets of 1.37 billion won for the 2030 Fire tribes, the annual living expenses will be 54.8 million won (4.45 million won per month). It is about 4.57 million won per month. In other words, if you collect 1.37 billion won, you can spend 54.8 million won per year and 4.57 million won per month for living expenses. This is much higher than the appropriate retirement living cost of 2.68 million won per month (2019) announced by the National Pension Service. It can be said that the 2030 Fire tribe dreams of a fire tribe who lives with a living cost of about 4.57 million won per month.

Respondents are saving and investing more than 50% of their salary for early retirement. Those with more than 70% of their savings investment to income amounted to a whopping 29.4%. The 60% level was 14%, and the 50% level was 22.4%. In conclusion, 65.8% of people invest more than half of their salary.

It’s amazing! Their main investment vehicle was stocks. Most of the respondents are investing in stocks (92.8%), savings such as deposits and savings (63.9%), real estate (43.2%), funds (38.5%), and virtual currency (19.3%). MZ generations are not biased towards a specific type of asset formation and are actively investing in even virtual currency.

So, how long do we need to collect to achieve early retirement? Assuming that 50% of your salary is saved and invested every month, if you consistently make 8% annual return to retire at age 51, investing for about 20 years will help you achieve your desired target assets. The higher the return on investment, the shorter the time to retirement. If the annual return rate is 16%, the period is reduced by 6 years to 13.9 years.

The 100-year-old research institute said in a report, “If you start investing for retirement in your 20s, the possibility of early retirement is higher. On the other hand, if the retirement preparation period remaining until the age of 51 is insufficient, the investment burden increases under the same conditions. It is advisable to reconsider,” he advised.

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