[Financial Planning for the 100-Year Life] Why Financial Assets Are More Essential in the Era of Longevity

Last Year, Financial Assets Accounted for Only 24% of Household Wealth
Raise the Ratio to 40-50% Before Retirement
Essential for a Stable Life After Retirement

Jinwoong Kim, Research Fellow at NH Investment & Securities 100-Year Life Research Institute

According to the results of the Household Finance and Welfare Survey released by the Ministry of Data and Statistics in December 2025, Korean households own an average of KRW 566.78 million in assets. Of this amount, KRW 429.88 million, which accounts for 75.8%, is concentrated in real assets such as real estate, while financial assets make up only 24.2% (KRW 136.9 million). If we further exclude deposits for monthly or yearly rental contracts related to housing, the amount of pure financial asset savings stands at just 17.6% (KRW 99.6 million). Ultimately, the average financial structure of Korean households is excessively skewed toward real assets, mainly real estate.

Such an asset structure with a low proportion of financial assets is not ideal for living in the era of 100-year lifespans. Real assets like real estate are not only difficult to liquidate quickly, but it is also hard to receive fair value if you have to sell in a hurry. Moreover, most of these assets are held for actual use, such as residential housing, rather than as investment real estate intended to generate income.

In the past, during periods of economic growth when real estate prices generally rose, even residential properties contributed significantly to wealth accumulation as their value appreciated. However, as we enter a low-growth era, it has become increasingly difficult to expect sustained asset growth solely from real estate. Now is the time to shift the asset management paradigm away from real estate and toward financial assets that are more advantageous for living a long life.

The reason financial assets are more important in the era of 100-year lifespans is that they allow for more reliable and regular cash flow after retirement. Unless the property is rental real estate that generates rental income, a house used for residence only leads to additional expenses, such as maintenance fees or property taxes, and does not serve as a source of regular income. Although home pensions have recently attracted attention as an alternative, they are only a supplementary measure for those whose only asset is their home and who lack sufficient retirement savings.

The standard approach to retirement preparation lies in asset management that utilizes financial assets. As previously mentioned, the proportion of financial assets in Korean household assets remains very low. With this level of financial assets and current interest rates, it is difficult to maintain a stable post-retirement life for over 30 years. Although financial assets have increased compared to the past, the growth is still slow, and the real estate-centered structure remains robust.

Of course, achieving a balance between real assets and financial assets is not easy. Especially in a sociocultural environment like Korea, where there has been an obsession with real estate, it is difficult to rapidly reduce the proportion of real assets. However, it is also not an option to ignore the risk of post-retirement liquidity shortages while lifespans continue to grow.

Until the 40s, when household economies typically grow with homeownership as a primary goal, it is inevitable that asset composition will be centered on real assets. However, since it is impossible to suddenly change the composition of all household assets just one or two years before retirement, from the late 40s or, at the latest, the 50s, households must actively manage their portfolios to increase the proportion of financial assets.

So what is the proper balance between financial and real assets? The answer can vary widely depending on individual circumstances and conditions, so there is no single solution for everyone. However, if we look at major advanced countries where longevity has become common and aging has progressed for a long time, the proportion of non-financial assets such as real estate in household assets is managed at 60% or less. Based on this, raising the proportion of financial assets to 40–50% by retirement would enable stable and efficient retirement asset management in the era of 100-year lifespans.

Jinwoong Kim, Research Fellow at NH Investment & Securities 100-Year Life Research Institute

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