"Real Estate Alone Insufficient for Retirement Living Expenses... Pension Income Portfolio Needed"

Mirae Asset Retirement Research Institute Announces Retirement Life Trend Survey Results
76% of Workers in Their 50s Have Private Pensions, but Nearly Half Are Unaware of Exact Accumulated Amounts and Expected Benefits

[Asia Economy Reporter Minwoo Lee] It has been pointed out that it is difficult to secure retirement living expenses with a safety-centered asset composition such as real estate. It is analyzed that a pension portfolio should be built and asset management methods to prepare for zero interest rates should be found.

Mirae Asset Retirement Research Institute announced on the 22nd that it published the "2020 Mirae Asset Retirement Life Trend Survey Report - Retirement Asset Awareness, Attitudes, and Management Plans of Korean Workers in Their 50s," which contains such content. The institute conducted a survey in December last year targeting 1,960 workers in their 50s nationwide on the status of retirement assets, awareness and attitudes toward retirement assets, and future management plans, and released this data.

According to the survey, the private pension ownership rate of households of workers in their 50s was 76%. Among them, 25% had holdings exceeding 100 million KRW. The ratio planning to receive pensions (83%) was higher than those planning to receive lump-sum payments upon retirement pension receipt (17%), and there was a high preference for pensions, such as hoping to cover an average of 63% of retirement living expenses with lifetime pensions.

The average total assets of respondent households were 660 million KRW. Among these, 72% were in real estate, making it difficult to prepare retirement living expenses with the remaining assets alone. In addition, a significant portion of financial assets was composed of low-yield savings and deposits. It was pointed out that asset composition needs to be changed to secure retirement living expenses.

Despite the high preference for pensions, the actual pension asset management level did not meet expectations. 39% of respondents did not know the expected amount of National Pension benefits, and 52% did not know how much their private pension savings were. Also, on average, they expected to receive more than 4.6 times the amount of their own retirement pension holdings.

Meanwhile, workers in their 50s tended to avoid loss risks and manage assets stably, but interest in investment was not low. Among respondents, 79% showed a stability-oriented investment tendency, but 27% showed interest in overseas investment, indicating a desire to find investment alternatives amid the low-interest-rate trend.

One in five households (21%) answered that they plan to secure retirement funds through "housing downsizing." Among respondents whose combined housing price was 900 million KRW or less, 55% expressed willingness to subscribe to a housing pension. In addition, there was a tendency to utilize real estate diversely, such as purchasing new real estate.

A representative of Mirae Asset Retirement Research Institute advised, "Understanding one's retirement assets is the first step in retirement planning," and added, "By composing a portfolio in a ‘pension type’ including pension products, income-generating real estate, bonds, dividend stocks, and housing pensions, the most effective pension income can be prepared. At the same time, investment alternatives such as income-type assets and global diversification should be discovered to prepare for low interest rates."

This content was produced with the assistance of AI translation services.