Let's face it. Millennials are known for social movements.
And, so, it may come as no surprise that this generation is also trying to shake things up in retirement.
The Future of Retirement: Predictions & Perspectives was one of the panel discussions at TheStreet's all-day event Retirement, Taxes & Income Strategies Symposium, held recently in New York City.
Moderator Robert Powell, TheStreet's Retirement Daily editor tackled this ever-changing landscape. An all-star panel discussed the trends that may affect how you save for, and live in retirement. A hot topic that came up more than once during the all day event was the FIRE movement.
What is the FIRE Movement?
"The FIRE movement is sort of taking them [millennial's] by storm," said Roger Ma, Founder of Lifelaidout.
What is the FIRE movement? It's 'financial independence, retire early", according to Ma. You might say that FIRE is a lifestyle movement. The goal is financial independence, and to retire early.
"People in their twenties and thirties instead of saying, 'oh, we're going to work 'till 65 and then enjoy our life,' what they're saying is, 'well wait a second, we can decrease our expenses, save a fair amount of money and then retire in our thirties and forties and then not have to work,'" Ma said.
Here's a big idea: Millennials are making sure their expenses are so low that their earnings, both from job income and their investment accounts, more than cover their expenses. What else does this mean? Millennials can then put more of their job income into their retirement and investment accounts, to create a higher rate of compounding.
And that expense management can also show up in which investment vehicles a person chooses. A "third pro is that they invest pretty efficiently. So they're mostly using low cost passive mutual funds, probably pain 10 bips [basis points] or below for their investments," Ma said. ETFs can be a huge part of that.
Executing that lifestyle is really hard, especially for a demographic that hasn't matured and aged. "This is not going to work," said Douglas Boneparth, President of Bone Fide Wealth. "You [millennial's] just haven't experienced enough to know things at a very macro level." He added, "Fire is extreme - it's too pure."