[Gold Age 22] CEO Bae Jaegyu "Stable retirement assets cannot be managed stably"

Bae Jaekyu, CEO of Korea Investment Trust Management, is delivering the keynote speech on "Pension Management Strategies for a Happy Old Age" at the 2022 Asia Economy Golden Age Forum held on the 20th at the Bankers Hall in Jung-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Junho Hwang] "Stable retirement assets cannot be created through stable management."

On the 20th, Bae Jaekyu, CEO of Korea Investment Trust Management, stated at the 2022 Asia Economy Gold Age Forum held at the Bankers Hall in Myeongdong, Seoul, "We need to move away from principal-guaranteed products for retirement pension assets."

Last year, the life expectancy was 83.5 years, but the actual retirement age was 62.9 years, resulting in a post-retirement lifespan of 20.6 years. Assuming an average annual pre-retirement income of 62.55 million KRW and applying the OECD income replacement rate of 60%, an annual pension of 37.53 million KRW (3.13 million KRW per month) can be considered an appropriate retirement pension. To achieve this, about 773.12 million KRW needs to be accumulated in the pension. If the annual pension return rate is 6%, a monthly contribution of about 623,000 KRW is required, but if the current pension return rate remains around 2%, a monthly contribution of 1.38 million KRW is necessary, which could pose difficulties in daily life.

He explained, "Considering that the real return rate of principal-guaranteed products adjusted for inflation is 'negative,' it is essential to select products that can achieve target returns and manage them over the long term to sow the seeds for a happy old age," adding, "The default option could be an appropriate alternative to increase pension returns."

Additionally, CEO Bae viewed now as the right time for pension investment. He said, "Although the stock market has recently declined, now is the right time to invest," and "It is a period when good stocks can be purchased at a low price." Regarding choosing pension products, he emphasized, "You need to carefully examine the target return and fees of pension products," adding, "A product with high fees does not necessarily mean better returns, so careful consideration is required when investing."

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