[Gold Age 21] CEO Kang Chang-hee "Increase the Proportion of Financial Assets as You Age"

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Kang Chang-hee, CEO of Trust Asset Management Pension Forum, delivered the keynote speech titled "Asset Management for a Happy Old Age in the Era of 100 Years" on the 8th at the '2021 Gold Age Forum: Smart Retirement Planning for Silver Investors' hosted by Asia Economy at the Bank Federation Building in Jung-gu, Seoul. The forum was held via non-face-to-face online live streaming to prevent the spread of COVID-19. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporters Ji Yeon-jin and Gong Byung-sun] "As you get older, you should increase the proportion of financial assets."

Kang Chang-hee, head of the pension fund at Truston Asset Management, presented this basic principle of retirement asset management in his keynote speech at the ‘2021 Asia Economy Gold Age Forum’ held on the 8th at the International Conference Hall of the Bankers’ Hall in Jung-gu, Seoul. Since most middle-aged and older Koreans concentrate all their wealth in real estate such as housing, there is a risk of insufficient funds for retirement life, so wealth should not be concentrated in one place.

Kang emphasized, "In advanced countries, the proportion of financial assets is 70% and real estate is only 30%, but in Korea, real estate accounts for 80% and financial assets 20%," adding, "For people in their 50s and 60s, a balanced ratio of 50% real estate and 50% financial assets is appropriate."

He suggested managing financial assets by first accumulating a lump sum through installment investments and then diversifying investments with that lump sum. He explained, "You need to create a portfolio and diversify investments. The portfolio should consider factors such as age, asset status, family situation, investment tendency, as well as the investment goal and duration, whether it is for retirement funds or children’s education expenses."

Kang stressed, "The principle of asset management is to utilize experts and invest from a long-term perspective." For example, he explained that although the global asset management company ‘Fidelity’ sold a fund that achieved a cumulative return of 2700% from 1977 to 1990, half of the investors in that fund terminated their investments midway and suffered losses.

Kang also pointed out that middle-aged and older people, after retiring in their early 50s and re-entering the workforce, see their income reduced by more than half, while expenses for children’s education, marriage costs, elderly care, and medical expenses increase, causing them to fall out of the middle class after their 60s. He highlighted that children-related risks are the biggest obstacle to retirement preparation. He said, "Only in Korea do parents bear responsibility not only for their children’s tuition but also for marriage expenses," adding, "If parents bear the costs of private education, tuition, and marriage expenses, they cannot save money."

To prepare for this, he proposed building a ‘three-layer pension’ consisting of the National Pension, retirement pension, and private pension, and if unprepared, utilizing real estate-based pensions such as housing pension and farmland pension. He emphasized, "Koreans are diligent in earning money, but when money is insufficient, they have not studied how to live within their means, how to spend beautifully, so-called exit management," and stressed, "True economic independence is not the ability to earn money but the ability to live according to the given economic situation."

Hong Sung-guk, a member of the Democratic Party of Korea, said in his congratulatory speech that "While it is said that one must be good at financial technology, asset management is much more important," and added, "The term asset management is the most important topic in the Gold Age era." He said, "Many people are struggling due to COVID-19, but after the pandemic, they will think more about their retirement," and added, "Retirement should be internalized by studying excellent content like the Gold Age Forum." This means that it is much more important not only to know the theory but also to apply it in real life.

Hong added, "Looking at today’s topic, it covers not only simple retirement preparation but also virtual currency, wealth, and various forms of project financing (PF)," and said, "Since the financial environment is constantly changing and the scope of finance is expanding, I hope this event broadens the horizon for retirement preparation."

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