More young Koreans look to stocks, bonds as retirement nest egg
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A Seoul office worker surnamed Park has been setting aside 1 million won ($744) from her monthly paycheck for retirement since early this year, after friends and colleagues encouraged her to start investing.
She puts the money into two types of retirement accounts — a pension savings account and an Individual Retirement Pension (IRP) — with most of her savings invested in exchange-traded funds (ETFs) tracking the S&P 500. She makes her ETF purchases automatically each month rather than trying to time the market based on currency or stock price movements.
“Before, I was just paying into the national pension and my bank savings accounts. But I started to worry that I wasn’t doing enough to build up my assets,” the 32-year-old said.
News that the national pension fund could run out sooner than expected as Korea’s birthrate falls and its population ages only heightened her concerns.
“That was around the time people around me started encouraging me to invest, so I decided to give it a try,” she said. “I’m thinking of this as building my own pension over time. I want to keep accumulating investments that I believe will grow steadily over the long term, rather than be swayed by short-term numbers or sell along the way.”
Park is among a growing number of younger Koreans looking beyond traditional savings and public pensions to build their own retirement nest eggs.
The trend is also reflected in the statistics, with the share of people in their 20s and 30s citing stocks, bonds and other financial assets as a means of preparing for retirement rising about fivefold over the past 14 years.
According to the latest survey by the Ministry of Data and Statistics, 12.8 percent of people in their 20s and 13.4 percent of those in their 30s said they were using such assets to prepare for retirement last year. Both figures rose by more than 10 percentage points from 2.6 percent and 2.8 percent, respectively, in 2011, when the survey was first published.
The share jumped in particular around 2021, when a wave of retail investors poured into the stock markets, and has remained in the double digits since.
Older Koreans have also become more likely to turn to stocks or bonds for retirement, but the shift has been less pronounced. The share rose from 2.4 percent to 8 percent among people in their 40s, from 2.4 percent to 6 percent among those in their 50s, and from 1.4 percent to 3.1 percent among people 60 and older over the same period.
“Younger people have greater access to information and are interested in personal finance and wealth management, so they can easily come across tax-advantaged products such as pension savings accounts and IRPs on social media and act on it,” an official from the financial industry said. “With lifetime employment becoming less certain, they also have a stronger sense that they need to prepare for their own future.”
That growing emphasis on private retirement savings reflects a broader concern over whether the national pension alone will be enough to support Koreans post-retirement. The average monthly pension benefit over the past year was 880,000 won, well below the estimated 1.54 million won needed to cover basic living expenses for a single-person household.
Despite growing interest in financial assets, the national pension and traditional savings products remain the most common forms of retirement preparation among Koreans.
Among those aged 19 and older, 71 percent cited the national pension as a source of retirement income last year, making it the most widely used option. Bank deposits, savings plans and savings-type insurance followed at 44.1 percent.