[Gold Age 22] Kwak Jaehyeok Senior Expert "Digital Asset Management Service, an Alternative to Reduce Retirement Preparation Gaps"

Kwack Jae-hyuk, Senior Specialist of the WM Star Advisory Group at KB Kookmin Bank, is giving a lecture on the topic "2022, Diagnosis of Issues and Alternatives in Retirement Financial Planning" at the 2022 Asia Economy Golden Age Forum held at the Bankers Hall in Jung-gu, Seoul on the 20th. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Lee Jung-yoon] "Digital asset management services can be a practical alternative to meet the asset management service needs of the majority of elderly people who are non-wealthy."

Jae-hyuk Kwak, Senior Specialist of the WM Star Advisory Group at KB Kookmin Bank, stated this on the 20th at the 2022 Asia Economy Gold Age Forum held at the Bankers Hall in Myeong-dong, Seoul, emphasizing, "Previously, due to high costs and low accessibility, only elderly people with large assets could use asset management services in a limited way, but digital asset management services that provide asset management solutions using digital platforms can overcome these barriers."

Senior Specialist Kwak diagnosed that the elderly poverty rate in Korea is among the highest in the OECD (Organization for Economic Cooperation and Development), and the actual income replacement rate of the National Pension is low at around 22.4%. Therefore, household income by age peaks in the 50s and then rapidly decreases, but the necessary appropriate monthly retirement living expenses decrease only slightly, resulting in deficits starting from the 70s. According to the National Pension Research Institute, as of 2020, people in their 50s and 60s had income exceeding expenses, but from their 70s, expenses surpassed income. For households in their 70s, total household income (pre-tax, annual) was 21.55 million KRW, while necessary appropriate retirement living expenses (annual) were 28.2 million KRW. For those aged 80 and above, total household income was 13.69 million KRW, and necessary appropriate retirement living expenses were 25.56 million KRW.

In this situation, various demands for retirement preparation arise. When the first baby boomers were in their 30s and 40s, the wealth formation period, the focus was on raising awareness of retirement preparation and on saving and investing. Solutions were relatively simple and uniform. After the retirement of the first baby boomer generation born in 1955 in 2015, diverse concerns about retirement preparation became necessary, and the importance of prior preparation was highlighted.

Senior Specialist Kwak presented that recent major financial counseling cases for the elderly include ▲concerns and dissatisfaction about receiving public pensions and withdrawing private pensions ▲increased burden of expenses such as health insurance premiums and property taxes ▲management and operation plans for retirement assets ▲concerns about wealth transfer to children or support for their independence.

Although the importance of retirement preparation is growing and various demands are emerging, long-term, comprehensive, and preemptive solutions are limited to wealthy individuals. Senior Specialist Kwak said, "To increase financial independence in old age, it is necessary to consider various solutions," adding, "Financial products can address partial issues, but it is difficult to provide comprehensive solutions, so solution-providing base services are mostly limited to wealthy individuals."

Ultimately, digital asset management services are proposed as a way to bridge this gap. However, Senior Specialist Kwak calls for differentiated approaches due to the low utilization of digital information services among the elderly. He said, "Suppliers need to improve systems and establish marketing directions so that many elderly people use digital asset management services," and "The government and public institutions should provide information and supply educational infrastructure to encourage general elderly people to use digital asset management services."

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