[Gold Age 21] "Steady Cash Flow After Retirement Is Important... Adjust Timing of Pension Receipt"

Kim Tae-woo, Team Leader of Investment Solutions Team at Hanwha Life Insurance

Kim Tae-woo, an internationally certified financial planner at Hanwha Life, attended the "2021 Gold Age Forum: Smart Retirement Planning for Silver Investors" hosted by Asia Economy on the 8th at the Bank Federation Building in Jung-gu, Seoul. He gave a presentation on the topic "Pension Planning Strategies Considering Health (Leading Cause of Death) Life Expectancy in the Era of 100 Years." 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 Reporter Oh Hyung-gil] Kim Tae-woo, Team Leader of Hanwha Life Investment Solutions Team (Certified International Financial Planner), said, "The timing of pension receipt should be adjusted considering healthy life expectancy and modal age at death."

At the '2012 Gold Age Forum' held on the 8th at the International Conference Hall of the Bankers' Hall in Jung-gu, Seoul, Team Leader Kim emphasized, "In the era of the 100-year lifespan, the effectiveness of pensions varies depending on when you start receiving them."

He explained, "In the New Normal era, not only wealth polarization but also lifespan polarization is rapidly becoming a reality. Lifespan varies depending on where you live, which means lifespan polarization also occurs according to income."

Team Leader Kim gave examples of Yongin and Yeongdo-gu in Busan. In 2018, among 250 cities, counties, and districts nationwide, Suji-gu in Yongin had the highest healthy life expectancy at 75.3 years, while Yeongdo-gu in Busan recorded the lowest at 62.1 years. Also, the top 20% income group had a healthy life expectancy of 73.3 years, whereas the bottom 20% income group had 65.2 years.

He advised that to devise a good pension strategy in the era of lifespan polarization, one must consider healthy life expectancy and the modal age at death. The modal age at death generally refers to the age at which the most people die.

Team Leader Kim pointed out, "While the average life expectancy in our country is 82.7 years, healthy life expectancy is 70.4 years, indicating that people live with illness for about ten years. The age with the highest frequency of deaths in a year is 88, meaning some live up to 20 years after their healthy life expectancy."

Kim Tae-woo, an internationally certified financial planner at Hanwha Life, attended the "2021 Gold Age Forum: Retirement Planning for Smart Silver Investors" hosted by Asia Economy on the 8th at the Bank Federation Building in Jung-gu, Seoul. He gave a presentation on the topic "Pension Planning Strategies Considering Health (Leading Cause of Death) Life Expectancy in the Era of 100 Years." The forum was conducted via non-face-to-face online live streaming to prevent the spread of COVID-19. Photo by Kang Jin-hyung aymsdream@

He argued that in an era of lifespan polarization, whether to receive a pension or a lump sum is extremely important.

He diagnosed, "There is much talk about the importance of pensions in the longevity era, but most people cannot receive pensions because the pension amounts are insufficient. Among 2.96 million retirees last year, 74% had severance pay of 10 million won or less, totaling 2.2 million people, while only 3% had 100 million won or more."

He added, "Talking about converting severance pay of less than 10 million won into a pension does not align with reality. To devise a good pension receipt strategy, one must understand the characteristics of pensions well."

As a tip for pension receipt strategy, he advised that old personal pensions subscribed before 2000 do not require paying interest income tax if terminated due to unavoidable reasons such as retirement. He also suggested not to receive severance pay into a salary account to utilize pension receipt limits, as receiving severance pay through a salary account disqualifies one from income tax reductions.

Team Leader Kim emphasized, "There are three unknowns in retirement planning: retirement timing, illness timing, and death timing. It is essential to create a steady cash flow until death. Adjusting the timing of pension receipt appropriately according to the life cycle is more important than anything else."

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