Want To Retire Early, Know First FIRE Movement

Pension. (Pixabay illustration)

JAKARTA - The need to be able to live a happy life is everyone's dream. In fact, many Indonesians want to live happily and well without the need to work hard in old age.

If only imagined, of course this desire is a utopia. But with careful financial planning, this is something that is very possible.

In a book Your Money or Your Life by Vicki Robin, there is a concept of Financial Independent, Retire Early (FIRE). This concept can certainly be an option and is even increasingly in demand by millennials who want to work as short as possible and can retire early.

Deputy head of Wealth Management BNI Teddy Satriadi explained that financial independence is an absolute must for young people. Moreover, there are many uncertainties such as being affected by _layoff_ at any time or other dynamic conditions.

“However, financial independence should not be interpreted as not wanting to work for long, it gives the impression of being lazy at work. But _independent_ means not depending on salary again, so it doesn't automatically have to retire early, is it not like that, "he said.

He emphasized that financial independence must depend on each individual's budget. This means that the time needed to achieve financial independence will vary from person to person.

“What we really should aim for is when we are in our old age, we no longer think about what to eat tomorrow, but rather enjoy life by traveling. Therefore, FIRE is something that is absolutely instilled in the younger generation because we don't know what will happen in the future,” he said.

He continued to be wise in terms of saving and investing at an early age is a must. When investing, the millennial generation must also understand the risk profile and the chosen investment instrument.

“As long as you are young, you have a high level of acceptance of risk because you don't need a lot of liquidity. In addition, the investment horizon is still long," he concluded.

Meanwhile, Personal Finance Enthusiast Dani Rachmat CSA, CFP, QWP said that living in the digital era is now easier given the variety of investment products offered.

In fact, there are many institutions, platforms and investment instruments that can be the target of choice with relatively affordable capital.

"This is an opportunity for young people to invest as early as possible. The relative allocation will be different with each person's age, so we just have to adjust it to our age," he said.

He continued, the retirement age in Indonesia is set at 56 years old. This age is relatively early compared to large countries such as the United States, which is in the range of 65 years. In fact, neighboring Singapore still sets the retirement age at 63 years.

This also means that the income potential of the Indonesian people is smaller than that of developed countries. Therefore, millennials must have the right financial strategy to be able to find replacement income at their retirement age.

"Because FIRE means being free to decide what we want to do, start as early as possible and invest as aggressively as possible, it doesn't need to be big. As long as it's routine every month so that our money runs fast," he said. (ADV)