By Kang Seung-woo
The Korean baby boomer generation is not fully ready for its post-retirement life, although they are optimistic about it, a report by the Korean arm of a U.S.-based life insurer showed Tuesday.
The MetLife Korea Foundation, the Seoul National University Institute on Aging and Gallup Korea jointly released a study of 4,668 boomers, titled “Korean Baby Boomers in Transition.”
These people were born between 1955 and 1963, the period after the Korean War ended in 1953 that saw a sharp increase in birthrates.
The report said that only 27 percent of them have calculated their retirement income needs. Considering the fact that the oldest Korean baby boomer reached 55 in 2010 and retirement can begin as early as this, the low retirement income calculation rate could emerge as a serious national problem.
It also said that only about half of baby boomers are currently saving for retirement.
The average amount of savings for retirement is 172,000 won ($154) per month and a large majority of baby boomers possess insurance policies for retirement (8 out of 10). Nearly 85 percent contributed to the national pension and other public pensions systems, while 69 percent possess bank depository products to prepare for retirement.
As a group, baby boomers are risk avoiders, it noted.
More than three quarters of them report that they will take only minimum risks even though the return would be less desirable. Only about one fifth said that they will take average risks to gain average returns.
Despite the generation’s lack of preparation, as a group, they have a bright outlook when it comes to their future financial situation.
“Given the heavy weight and importance of Korean baby boomers to the total population, it should not be overlooked that their issues go beyond their own quality of life and affect the sustainability of all society,” Han Gyeong-hye, a professor at Seoul National University, said in a press conference.
“The report points out that discussions about Korean baby boomers have tended to see them as a problem which will cause a burden to society and, thus, focuses on difficulties in their living conditions and dismal future outlook. This report emphasizes that, as they are expected to face aging and mass retirement soon, we need to take a more positive approach and shift the focus of discussions towards what efforts are needed for the future.”
Baby boomer household assets consist mainly of real estate at 82 percent, while financial assets make up only 15 percent of the total.