Those in their 40s and 50s who are preparing to retire are expected to need 170 million won per child after retirement. Some analysts say that due to the concentration of assets in real estate, it will be difficult to raise various funds necessary after retirement.
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On the 11th, the Korea Insurance Development Institute published the ‘2020 KIDI Retirement Market Report’ containing these details. The report was prepared based on a survey conducted by the Korea Insurance Development Institute in 2019 on non-retired persons in their 30s to 50s (for 700 nationwide) and statistical data from the National Statistical Office, the National Pension Service, and the Ministry of Health and Welfare.
Even after retirement, 6 out of 10 responded that the burden of support for their children exists. The cost of education and marriage was estimated at 170 million won per child. Insurance Development Institute
170 million won for children even after retirement
According to the Korea Insurance Development Institute survey, 62.6% of cases feel the burden of supporting their children even after retirement. Compared to the 2017 survey, it increased by 6 percentage points. The average cost of support per child after retirement is estimated at 69.89 million won and marriage cost of 119.4 million won. Even after retirement, the cost of 170 million won per child is required. As for the estimated cost per child, it costs more if you have more children. In fact, according to the National Pension Plan’s retirement security panel survey, children were unemployed at the time of retirement (22%) and unmarried children (35%).
If so, how much income will those in their 40s and 50s want after retirement? The hoped income after retirement of those who answered the survey was 68.5% of the income before retirement. The desired monthly living cost was 3.12 million won for a couple, and the minimum living cost was 2.27 million won. However, the expected income after retirement was 50.4%, which is half of the income before retirement, which was far from expected. In fact, according to a survey by the National Statistical Office, the average annual income of retired households was 27.87 million won, which was 58% of the income of non-retired households (62.55 million won).
Those in their 40s and 50s who responded to the Korea Insurance Development Institute survey responded that the average monthly cost of living was 3.12 million won. Insurance Development Institute
The estimated average retirement benefit for those in their 40s and 50s was 9466 million won. By the amount of money, there were 50 million won or less (40.1%) and 50 million to 100 million won (37.3%). As for retirement benefits, many respondents said that they would use it for retirement living expenses (67.1%), family support (19.8%), asset investment (9.5%), and startup use (2.8%).
70% of assets are real assets such as real estate… Preparing for retirement centers on the national pension
An analysis also found that it may be difficult to provide necessary living funds after retirement. According to the 2019 Household Financial Welfare Survey of Statistics Korea, cited by the report, the average assets in their 40s were 4,6967 million won, and those in their 50s were 493.45 million won. More than 70% of all assets are real assets such as real estate. Those in their 40s accounted for 72.4% (339.94 million won) and those in their 50s 74.4% (36.7 billion won). Among the real assets, most of them are concentrated in real estate, with more than half of them in their 40s (57.5%) and 50s (52.7%). The Korea Insurance Development Institute analyzed that “there is a high proportion of real assets, so there is a concern about liquidity limitations in the future funding for retirement living.” .
According to the Korea Insurance Development Institute’s retirement market report, 70% of assets in their 40s and 50s are real assets such as real estate, and it is analyzed that there may be difficulties in preparing liquidity when preparing retirement funds. Insurance Development Institute
The retirement preparation method was highly dependent on public pensions such as the national pension. The percentage of people who chose public pension as a preparation for retirement was male (72.9%) and female (59.2%). In the case of women, the retirement preparation using deposits and savings (20.2%) and private pensions (12.1%) was higher than that of men (deposits and savings 11.9%, private pensions 6.4%). However, the Korea Insurance Development Institute pointed out that the national pension alone may not be enough to prepare for retirement. In 2019, the income replacement rate for recipients of the national pension (old-age pension) was 21.3%. The Korea Insurance Development Institute analyzed that “high income people need a private pension in order to live a retirement life similar to the standard of living before retirement due to the low income replacement rate of the national pension.”
Reporter Ahn Hyo-seong [email protected]