“Millennials are on ‘FIRE’?”
By Brook Ptacek, IAC Student Intern
The first myth this study debunks is that millennials are all of the “FIRE” type (Financial Independence, Retire Early). The general assumption, the study points out, is that millennials have “lofty” investment goals and want to retire before the age of 40. According to FINRA and CFA Institute, however, categorizing millennials as the “FIRE” type may be much farther from the truth.
Rather, the study shows that millennial investment goals are on par with their GenX and Baby boomer counterparts. According to the study, millennials have “modest financial goals,” expecting to retire at the age of 65 years old. Only 3% of the millennials surveyed with taxable accounts believe they will be able to retire before the age of 50. In fact, what was most shocking was that of the segment of millennials investors surveyed who already had some sort of investment account about 9% said they will never retire because they could not afford to.
What’s worse, the study shows that millennial investors may also have a reduced incentive to invest. According the FINRA and CFA Institute, the research shows that there is a “lack of access” to employer-sponsored retirement plans. This is important because the study also shows that employer-sponsored retirement plans are also what help get a millennial’s foot in the door when it comes to investing. FINRA and CFA Institute note such retirement plans are “a key stepping stone to investing” because it is one of the “top influences” for getting millennials engaged. However, as the next blog post points out, there are also other factors that influence millennial-investing behavior.