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Eleven Years Into Retirement...

Posted April. 09, 2007 07:17,   


This is Sun City, a retirement community near Phoenix, Arizona. Here, married couples can enjoy golf, swimming, sports, movies, and much more at only 1.5 million won per month.

Floyd Hyden (77), who says he moved to Sun City after retiring at 65, tells us, “I live half of the year here and half in my Michigan home. It costs only half of what it costs to live in Michigan to live in Sun City.”

In the more developed countries such as the U.S. or Europe, a growing number of elderly people are spending their “golden years” in relative comfort.

Experts say that the retirement management systems that are firmly established in American and European societies, along with pension and social welfare systems, are playing a crucial role in the comfortable lives of the elderly.

Retirement management means “living comfortably for the rest of your life off the retirement assets accumulated during your working years.” The main focus of retirement management is in slowing down the exhaustion of resources rather than increasing assets, and in living comfortably.

By 2026, Korea, where aging is commencing faster that any other country in the world, is expected to become a super-aged society, in which over 20 percent of the population is over the age of 65.

Consequently, the call for systematic pension systems and retirement management is increasing.

However, the significant difference in opinions between the government and political parties regarding the national pension, which is the main basis for retirement funds, is posing difficulties in reforming the pension system, which is expected to increasingly become a financial burden.

In the light of this greater need for retirement management, we will begin a serial column that reports on the retirement management systems of developed countries such as the U.S., U.K., Netherlands, and Japan, and surveys the current state in Korea.

Beginning with this report, our reporting team asked the Seoul National University Department of Consumer and Child Studies to conduct personal interviews of 503 retirees in order to get an idea of the retirement management level of Korea. This is the first study that examined the lives of retirees from the age of 50 to 71.

The results showed that 66.8 percent of the retired (336) had “no preparations for retirement before actual retirement.” Also, 73.6 percent (370) of the interview pool replied that, “It is difficult to live off current assets and pensions after retirement.”

Additionally, the interviewees expected to be able to rely on their current assets (financial asset average 66.34 million won, real estate assets average, 180.37 million won) for an average of 11.72 years in the future. Considering the fact that the average age of the interviewees was 59, this means that retirement funds will run out at the age of 71.

Sohn Seong-dong, head of the Mirae Asset Retirement Pension Research Institute, said, “The more developed countries make thorough preparations for the later years of life through thorough pension systems and retirement management. Contrastingly, although the anxiety about early retirement is increasing in Korea, people are facing retirement having made no preparations at all.”