MZ generation pursues early retirement through financial freedom

“It is nice because I do not have to see people I dislike.”

That sentiment is often expressed by members of the so-called FIRE community, who aim for Financial Independence Retire Early through investments in the U.S. stock market. FIRE refers to a lifestyle in which individuals accumulate enough wealth to retire in their 40s. In recent years, it has become a popular aspiration among millennials and Generation Z, many of whom hope to fill their days with activities they enjoy, such as traveling or pursuing hobbies.

The key to FIRE is succeeding in investments that generate sufficient assets for retirement. Earned income alone is not enough to reach that level of wealth. The U.S. stock market has become the investment tool of choice, with many calculating that assets can grow steadily by roughly 10 to 20 percent per year through exchange-traded funds that track the S and P 500 and the Nasdaq 100, as well as dividend ETFs such as SCHD. These are also seen as practical vehicles for maintaining cash flow after retirement.

For those pursuing FIRE, this approach has become a lifeline compared to the stagnant domestic stock market, which has remained confined to a narrow trading band known as the Box KOSPI, and compared to real estate investment, which requires substantial capital and has become difficult due to the limitations of gap investing, where properties are purchased using tenants’ lump-sum deposits.

Public backlash toward recent comments from Bank of Korea Governor Lee Chang-yong and Deputy Prime Minister and Minister of Economy and Finance Gu Yoon-cheol, who linked the recent surge in the exchange rate to overseas retail investors, reflects the growing presence of these investors. Some do engage in speculative investments such as double- or triple-leveraged products and meme stocks. However, there are also overseas investors who take a systematic, long-term approach just like those aspiring to FIRE. These investors are highly sensitive to the potential tightening of capital gains taxes on foreign stocks, which currently imposes a 22 percent rate on annual gains exceeding 2.5 million won.

The real question is why the number of aspiring FIRE households continues to grow. Rather than remaining idle, many who retire early through FIRE generate additional income as freelancers, producing content on YouTube or blogs, writing, or giving lectures. In practice, FIRE does not mean abstaining from work entirely. It signifies opting out of corporate or institutional employment. Many cite a desire to avoid unpleasant colleagues, endure poor treatment, or constantly cater to others while earning wages they consider unsatisfactory.

The rise in aspiring FIRE households ultimately reflects a broader societal failure. South Korea has struggled to provide workers with sufficient incentives or motivation to remain in organizational settings. The country has not created enough high-quality jobs nor cultivated workplace cultures that employees find rewarding. Disparaging expressions, such as “Xso,” used to demean small and medium-sized enterprises, persist. Efforts to introduce a job-based pay system that aligns salaries with individual performance have also seen little progress.

The withdrawal of workers in their 30s and 40s, prime years for productivity, is likely to erode national competitiveness. With the 586 generation and other older cohorts holding numerical dominance, questions arise over whether populist politics have nudged the MZ generation toward becoming prospective members of the FIRE community.

MZ workers are expected to watch the process of extending the legal retirement age closely. If innovation in emerging industries linked to artificial intelligence, or the AI-driven transformation of existing sectors, is stalled by the vested interests of older generations, the number of aspiring FIRE households is likely to increase further.