65% of S. Koreans in 40s boost retirement savings

A growing number of South Koreans in their 40s have increased savings to prepare for life after retirement, a report said Monday. 

The survey published by Hana Bank’s in-house research center showed that nearly 42 percent of 1,000 people born between 1972 and 1981 answered that they feel the urge to save money for their later lives, among other things. The list of their priorities on spending included home purchases and children’s private education with 36 percent and 16 percent, respectively.

About 65 percent of the respondents have been saving income for retirement through various financial instruments such as savings deposits, installment savings or annuity insurance, with their monthly retirement savings amounting to 610,000 won ($545) on average, it said. 

Nearly 41 percent of them said they have placed a high emphasis on retirement savings due to a lack of financial assets like real estate, while 40 percent said they have not much time left to earn income. 

Retirement assets that the 40-somethings expect to collect until their retirement age stood at 290 million won on average and more than half said they will increase their savings for retirement, it added. 

The survey was conducted on income earners in their 40s living in populous cities across the country, including Greater Seoul and the four major metropolitan cities of Busan, Daegu, Daejeon and Gwangju, in November last year.

The surveyed 40-somethings turned out to have actively invested in children’s education despite their higher priority on retirement savings.
When asked to score how well they are prepared for major life tasks, they gave 63 points out of 100 to children’s education, the highest mark, followed by 59 points given to a home purchase, 45 points to saving money for life after retirement and 44 points to self-development.

Some 88 percent of those with children said they had sent their children to private educational institutes, spending an average of 1.07 million won for educational expenses.

Meanwhile, 56 percent of the respondents had succeeded in buying a home. Those who had received housing-related banking loans for home purchase held an average loan balance of 110 million won, with 60 percent of them saying they feel burdened by loan repayments. 

By Choi Jae-hee (cjh@heraldcorp.com)