How should a senior company exec plan for retirement?

○ Buying for rental price of current home is good option

Under his existing portfolio, if a man who is a senior executive at a company spends 4 million won (3,543 U.S. dollars) a month on living expenses, he will run out of money at age 83. Financial advisers say that though the man has sufficient financial assets, he will suffer a cash crunch in his silver years because he will retire in his mid-50s.

Whether he should purchase a house is the question. Advisers say buying a home is not a must because of the sluggish housing market, but because the man has surplus funds, he could buy a house not too far from his residence.

In this case, he is advised to take his time until his rental contract expires and look for houses that are urgently for sale. He should also look for homes on auction.

Park Won-kap, real estate team director at Kookmin Bank, said, "Housing prices in Bundang (a district in Seongnam, Gyeonggi Province) have fallen 30-40 percent since 2006. So a person can buy a home (of 85 square meters) in the range of 500 million won (442,869 dollars), which is at a similar level to the rental price (of 450 million won or 354,295 dollars) of his current home."

○ Seek higher investment returns if retiring early

If the man retires at age 54 and want to enjoy a stable life for the next 30 years, he must steadily expand his existing assets.

Lee Kyung-min, a "grand master" of the private banking team at Daewoo Securities, said, "If he chooses not to get another job after retirement, he can subscribe to immediate paying pension products or savings insurance for a fixed cash flow and non-tax benefits of 7-9 percent."

Counselors say the man must first hold sufficient talks with his family on his children`s marriage and educational costs, as well the family`s living standards. Having three children, he spends 100 million won (886,000 dollars) on each of his children for marriage and education, meaning his retirement preparation index will fall another 10 percentage points.

Kim Hyun-soo, a researcher at the asset management consulting team of Woori Investment Securities, said, "Living expenses of 4 million won (3,542 dollars) a month after retirement are a bit high. If he brings down this figure and his children`s marriage costs, he can reduce the burden for his post-retirement life."

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