Wednesday, July 2, 2008

Korea is "least ready" for retirement as its boomers age

Koreans are the least prepared financially for retirement among countries worldwide. It is time to take this seriously and prepare by investing in a variety of assets, instead of relying solely on property, said Fidelity International, a global asset manager. Announcing the retirement readiness index Tuesday, Fidelity Korea noted that the country's retirement income replacement ratio stands at 41 percent of the average income before retirement, far below that of Taiwan, Japan, Britain and the United States. The ratio is a measure of the actual income after retirement to the income just before retirement.   Assuming that the annual income of a Korean household is 10 million won, the actual expected income after retirement would be 4.1 million won. However, the desirable ratio for post-retirement life should be 62 percent, or 6.2 million won under the assumption, said Fidelity.  The asset management firm and Seoul National University's retirement planning support center calculated the ratio, utilizing data from the statistical office and Koreans' indirect investment patterns. The measure of the index includes assessing expected pension, severance payment and savings.

Source/more:
Korea Times, http://www.koreatimes.co.kr/www/news/nation/2008/07/123_26858.html

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