Gen Z -- those people born between 1997 and 2005 -- have worked hard to establish themselves as progressive when it comes to the working world. Unlike previous generations, they are passionate seekers of work-life balance; they want higher pay for work they enjoy doing, and they want better hours.
According to a new Credit Karma survey, they also want to retire early, though many might not quite have the means to do so.
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Gen Z's Heart Is in the Right Place
The survey found that 53% of Gen Z identifies as part of the FIRE (Financial Independence, Retire Early) movement. But nearly a third said they don't have anything saved for retirement. And 20% of all Gen Z respondents said they have no savings at all.
The FIRE movement, according to Investopedia, is defined by "frugality and extreme savings and investment." People who follow the FIRE philosophy save and carefully invest around 70% of their annual earnings, living on as little as possible. The goal is to aggressively push up the standard retirement age of 65.
For some, once they hit savings are equivalent to 30 times their annual expenses, they'll either quit their job or retire altogether.
The focal point of the movement is economic discipline and wise investments; it is hinged on the ability to stringently plan, over an extended period of time, to ensure that income is maximized and expenses are kept to the barest of minimums.
Success within the movement is pretty dependent on, at least, having some sort of savings account.
Gen Z Has Unique Financial Challenges
Gen Z's struggles with savings might have to do with high costs of living amid an economic environment shadowed by high inflation.
In 2015, the average rent for an apartment in the U.S. was under $1,200 per month. Just two years later, that number had risen to around $1,300. Now, it's around $1,700.
A third of Gen Z who responded to the survey said they don't feel financially stable right now. Of those with a retirement account, 20% have had to decrease their contributions and 22% who are currently employed said they couldn't afford to contribute at all.
A further 76% of Gen Z respondents don't have a 401(k) account, while nearly 90% don't have a Roth IRA.
“This generation’s appetite to retire early could have something to do with many of them not being beholden to the 9-5 career path," Courtney Alev, a consumer financial advocate at Credit Karma said. "Having grown up on the internet, they’re exposed to content creation at scale -- much of it touting alternative ways to make money that people their age appear to be making a cushy living off of."
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