Survey Finds Koreans Expect 128M Won Pension Shortfall in Retirement

South Korean investors believe they need 3.49 million won per month in pension income for a comfortable retirement as a couple, but expect to receive only 2.21 million won, leaving a monthly shortfall of 1.28 million won, according to a survey released Wednesday by KCGI Asset Management.

The Seoul-based asset manager surveyed 3,364 customers through its website from Dec. 17-24 last month.

The survey found that 78 percent of respondents feel unprepared for retirement, with 50 percent saying they are "generally unprepared" and 28 percent "very unprepared."

The most frequently cited reason for insufficient retirement preparation was "income too low" at 27 percent, followed by "burden of children's education costs" at 20 percent, "lack of knowledge about retirement preparation methods" at 18 percent, and "housing costs" at 15 percent.

Regarding expected retirement age, the largest group of respondents said they plan to retire "around age 60" at 39 percent, followed by "around age 65" at 26 percent.

For retirement savings products, pension savings funds were preferred over pension savings insurance, with 67 percent and 32 percent respectively. The main reason for preferring pension savings funds was "higher expected returns for long-term investment" at 50 percent.

When asked about risk-return preferences, 50 percent of respondents favored "medium risk with medium returns."

Among those investing in pension savings funds, 64 percent said they prefer U.S.-focused overseas equity funds.

"The survey showed that respondents are aware of the gap between their desired and expected pension amounts, and are taking a proactive investment approach to boost returns to bridge this gap," KCGI Asset Management said. "Since efforts to enhance returns involve risk, it appears necessary to increase personal pension contributions and seek professional help for portfolio management aimed at improving long-term returns."