Half of People in Their 40s Own Homes... Their Biggest Concern Is 'Retirement Funds'

Hana Bank 100-Year Happiness Research Center Report Published
Retirement Assets, Home Ownership, and Children's Education Are Top Concerns

[Asia Economy Reporter Kiho Sung] Half of people in their 40s have secured their own homes, but they are concerned about loans due to the 'Yeongkkeul' (borrowing to the limit for purchase/investment) craze, and retirement asset preparation is also their biggest worry. The expected retirement assets average 290 million KRW, and experts advise that although there is still time left in their economic activity period, since the period when children's education begins in earnest, they should engage in long-term and safe asset management.

Hana Bank's 100-Year Happiness Research Center announced on the 3rd that it published the life finance report "How People in Their 40s Live in Korea <4 Major Life Tasks Edition>." This report follows the recent "Money" edition, which presented signs of expanding financial investment and investor types among people in their 40s, and is the "Non-financial" edition.

60% of Home Loan Borrowers Say "Loan Repayment is Burdensome"

The center, together with Hana Financial Management Research Institute, presented the four major life tasks facing people in their 40s as ▲Child Education ▲Housing Stability ▲Retirement Asset Preparation ▲Self-Development. The report surveyed 1,000 income earners in their 40s living in Seoul and the four major metropolitan cities (Daejeon, Daegu, Busan, Gwangju) about which of the four life tasks they prioritize more and how confident they are in solving each task.

First, the average after-tax income of people in their 40s in Korea was found to be 4.68 million KRW, of which 3.43 million KRW is spent on consumption and 1.26 million KRW is saved or invested. Total assets average 410 million KRW, with average financial assets of 70 million KRW. Household loan balances average 80 million KRW.

People in their 40s viewed retirement asset preparation as the most important task. However, despite the importance they assigned, the mid-term evaluation score was only 45 out of 100. The expected retirement assets averaged 290 million KRW, with an expected retirement age of 59.5 years. Essential living expenses were estimated at 2.03 million KRW, and sufficient living expenses at 3.52 million KRW. Among people in their 40s, 65% save an average of 610,000 KRW monthly for retirement assets, and 59% expressed intentions to increase related savings in the future.

The second priority was housing stability, due to the belief that the longer one delays, the greater the burden of securing a home becomes. The achievement score averaged 59 points, 15 points higher than retirement asset preparation. One in four (25%) gave themselves a score of 80 or above (excellent). 56% own homes, 18% live in jeonse (long-term deposit lease), 13% in monthly rent, and the remaining 13% live in parents' homes or elsewhere.

The loan balances related to housing were 110 million KRW on average for homeowners, 80 million KRW for jeonse tenants, and 24 million KRW for monthly rent tenants. The report explained, "The higher the household income, the higher the utilization rate of loans to secure housing," and "Conversely, the lower the income, the higher the proportion of financial support from parents or relatives."

Among those with housing-related loan balances, 60% said loan repayment is burdensome. The causes of burden (multiple choices for 1st and 2nd rank) were 'Unable to save as much as needed' at 68%, ranking first, followed by 'Planned loan principal repayment is delayed or even increased' at 34%. Additionally, 92% of non-homeowners want to purchase a home, and 45% of homeowners want to move to a better house.

53% of People in Their 40s "Have Moved or Plan to Move for Children's Education"

The third priority, child education, received an evaluation score of 63, the highest among the four major life tasks. 27% gave a score of 80 or above, and only 6% rated it below 30, indicating insufficiency. The reason child education is considered the top priority is the hope that 'children will not fall behind and live a normal life.' Among parents in their 40s, 88% send their children to private academies, spending an average of 1.07 million KRW monthly, which corresponds to about 20% of household income.

In particular, half (53%) of parents in their 40s said they have moved or plan to move for their children's education, and a similar proportion (49%) are considering sending their children to study abroad.

Self-development was found to be a lower priority for people in their 40s. The most common self-development activity is preparing for certification exams, followed by physical training, financial study, and skill improvement. The average monthly self-development expense is about 220,000 KRW. While 48% have thoughts of starting a business, only 7% have concrete plans. Regarding startup capital, 58% consider 'less than 100 million KRW.'

The center advises that among the four major life tasks, individuals should self-assess whether they are excessively focused on one task or, conversely, continuously postponing any of them. Although people in their 40s recognize the importance of preparing retirement assets, in reality, it is difficult to practice as intended due to other tasks taking precedence. Wonju Lee, head of Hana Bank's Pension Trust Group, stated, "People in their 40s still have sufficient capacity to prepare retirement assets as they have remaining economic activity years," and added, "Providing competitive long-term asset management tools such as retirement pensions and Individual Savings Accounts (ISA) to support retirement asset preparation is the way for financial companies to contribute to society."

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