Just 3 out of 10 middle-aged South Koreans ready for comfortable old age

[Graphics by Song Ji-yoon]

Only three out of 10 middle-aged South Koreans can ready comfortable old age as most have to cough out retirement savings to cover for education and marriage of their children.

According to a study by the Korea Insurance Development Institute on Monday, currently employed Koreans in their 40s and 50s living in the capital and metropolitan areas on average get 94.66 million won ($86,269) in severance say when they retire.

The report is based on the institution’s own survey and insurance statistics as well as an analysis of data from Statistics Korea and National Pension Service.

The survey showed that 87.7 percent of the respondents plan to spend retirement benefit as living expenses for later years but expected much of the money going to finance children’s education and marriage.

An average of 69.89 million won would be needed to cover costs for education of their offspring and 101.94 million won for marriage.

The survey showed that 15 percent of the respondents expected education costs to exceed 100 million won and 15.4 percent 150 million won.

A retired couple would at least need an average of 2.27 million won a month, while a single retiree 1.3 million won. A desired amount would be 3.12 million won for a couple.

According to Statistics Korea data, average household income – which includes earned, business, property, and transfer incomes – dropped from 62.55 million won before retirement to 27.08 million won after retirement.

The Korea Insurance Development Institute noted that Koreans in their 40s and 50s account for 53.3 percent of the country’s total household assets, but mostly in properties that cannot aid in everyday income.

The survey also showed that only 31.3 percent of the respondents are sufficiently prepared for their later lives although they acknowledged the necessity of being prepared for their golden age. More than half of the surveyed have public pension plans while only 7.2 percent on private pensions such as annuity insurance.

The Korea Insurance Development Institute urged the government to introduce more tax benefits to make private pension a more appealing option.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]