In Their 20s, People Max Out Retirement Funds for Jeonse Rentals; In Their 30s, for Buying Their Own Homes

2019 Retirement Pension Statistics Results
54.4% of 20s Who Made Early Withdrawals Used It for Housing Rent, 36.8% of 30s for Home Purchase

Retirement Pension Reserves, 188.8 Trillion KRW → 219.7 Trillion KRW… 62.6% are Defined Benefit Plans
6.37 Million Enrolled Workers… Increased by 270,000 in One Year

The biggest issue of 2020 was undoubtedly the real estate frenzy. Despite the government's bold promises to control housing prices no matter what, apartment prices soared to unprecedented heights, striking a blow to the hearts of ordinary citizens without homes. The apartment night lights filling Seoul feel bitterly poignant. I hope the real estate market stabilizes in the new year of 2021. Photo by Yoon Dong-joo doso7@

[Sejong=Asia Economy Reporter Joo Sang-don] Last year, people in their 20s most frequently made early withdrawals from their retirement pensions for housing rent, while those in their 30s primarily withdrew for home purchases. This indicates that they gathered even their retirement funds to cope with soaring housing prices and jeonse deposits.

According to the 2019 Retirement Pension Statistics released by Statistics Korea on the 24th, 73,000 people made early withdrawals from their retirement pensions last year, an increase of 1.8% compared to the previous year. The amount withdrawn increased even more sharply, rising 7.6% from the previous year to 2.8 trillion KRW.

While long-term care accounted for the largest share of early withdrawal purposes at 37.7%, the reasons differed for those in their 20s and 30s. Among the 4,019 people in their 20s who made early withdrawals, 54.4% (2,185 people) did so to prepare funds for monthly rent or jeonse deposits. For those in their 30s, out of 28,230 people, 10,391 withdrew early for home purchases. Additionally, 8,131 people (28.8%) chose early withdrawal to prepare funds for housing rent.

The total amount of retirement pension reserves in 2019 increased by 16.3% compared to the previous year (from 188.8 trillion KRW to 219.7 trillion KRW). The composition ratio was as follows: Defined Benefit plans (62.6%), Defined Contribution plans (25.4%), Individual Retirement Pensions (11.6%), and IRP special cases (0.4%).

The total number of workplaces that introduced the system increased by 4.8% compared to the previous year (from 378,000 to 397,000 workplaces). Among 1,403,000 eligible workplaces, 385,000 had introduced the system, resulting in an introduction rate of 27.5%, which is 0.2 percentage points higher than 27.3% in 2018.

The total number of enrolled workers increased by 4.4% compared to the previous year (from 6,105,000 to 6,371,000). Among 11,509,000 eligible workers, 5,929,000 were enrolled, resulting in an enrollment rate of 51.5%.

The number of Individual Retirement Pension enrollees increased by 21.4% compared to the previous year (from 1,712,000 to 2,079,000), and the reserve amount increased by 32.4% (from 19.2 trillion KRW to 25.4 trillion KRW). Due to system changes, the number of additional enrollees increased by 33.9% compared to the previous year, reaching 918,000.

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