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South Koreans appreciate the importance of preparing for retirement, yet many consumers have limited knowledge about the various financial products available to them to help meet their retirement goals. Devising a specific plan that includes a variety of key retirement products can help South Koreans maximize their efforts and set them on their way to a comfortable retirement.
A Heightened Awareness of Retirement Issues
While consumers in many countries worry about preparing for retirement in general, most South Koreans consider specific issues related to their retirement goals. Our 2008 Retirement Readiness Research shows that more than eight in ten have already thought about retirement savings and accumulation and retirement income generation, as well as the longevity risks they may face. In fact, a greater percentage of South Koreans have considered these issues than their American counterparts, who cite retirement planning as their number one goal.
Moving Beyond Traditional Savings
It is clear that South Koreans are focused on long-term goals, which account for 60% of their savings and investments. Still, one in three respondents sets aside assets only in traditional savings vehicles such as bank accounts, while just 14% hold mutual funds (compared to over 30% in Taiwan). Though many understand products like savings accounts well, few are very familiar with key retirement products and techniques such as mutual funds, annuities, or estate planning used more commonly in other countries.
Professional Planning Can Help
While virtually all South Koreans are saving, many express regret at missed opportunities stemming from inadequate product information and ill-suited investment strategies. More than 70% of respondents believe there are products that can help meet their retirement needs, but admit they just don't know how to choose them.
Given their commitment to saving and their experience with investments that generated less-than-expected returns, South Koreans are much more receptive to professional guidance than their U.S. counterparts. Nearly nine in ten South Koreans wish a retirement expert could just tell them what to do, yet barely one-quarter have actually talked to a financial professional.
Read more about Retirement Issues and Perspectives.
Learn more about Individual Retirement Planning.
Source: Retirement Readiness in Korea. March 2008.
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