Retirement Age and Planning in U.S. and Korea

Pension funds in the US are mainly invested in top 5 global companies, while in Korea, real estate holds 63% of assets, raising retirement concerns.

### Retirement Age and Planning: A Comparison between Korea and the United States
* 🇰🇷 In Korea, the average retirement age is **50.5 years old**, 10 years earlier than the expected **65**.
* 🇰🇷 Economic preparation for retirement is hindered by insufficient income, with **52.5% of households not starting preparations**.
* 🇰🇷 The average monthly living expenses needed for retirement are estimated at **2.51 million won for basic needs** and **3.69 million won for a comfortable lifestyle**.
* 🇰🇷 The National Pension is the most common method for retirement preparation in Korea, with many expecting it to cover a **significant portion of their expenses**.
* 🇺🇸 In the United States, retirement ages of **60, 62, 65, and 70** are common, with various benefits associated with each age.
* 🇺🇸 The U.S. private pension system, including 401k and 403k plans, allows **tax-free savings and investment in the stock market**, with many retirees considering their pension as "**millionaire pensions**."
* 🇺🇸 Social Security benefits can be claimed as early as **62**, with full benefits at **70**, making it advantageous to **delay retirement for higher benefits**.
* 🇺🇸 U.S. pension funds are primarily invested in the **top 5 companies by market capitalization**, with 32% of U.S. household assets, totaling **$38.4 trillion**, including retirement assets.

In the United States, pension funds are mostly invested in the top 5 companies in the world by market capitalization. The top 5 companies in the world by market capitalization are Apple, Microsoft, Nvidia, Google, and Amazon. In the case of Korea, 63% of assets are concentrated in real estate. Even if people want to work more now, there are no job opportunities. Since retirement planning starts at the age of 45, I think this is a big concern. Hello, this is Lee Yuri, a Korean American attorney handling U.S. visa applications. For those of you considering retirement among those inquiring about U.S. permanent residency, let's compare the retirement age difference between Korea and the United States. First, when do people in Korea and the United States typically retire and at what age? Let's find out the average retirement age. According to the 2023 KB Financial Group Management Research Report, the average retirement age for Korean households is 50.5 years old.

The average retirement age is 65, which is about 10 years earlier than expected. The analysis results show that the period for economic preparation for retirement is shorter than expected. In a situation where the period for economic preparation has decreased, 52.5% of households have not started preparing for retirement. It is said that the average age to start economic preparation is 45. As for the reasons that hinder economic preparation for retirement, more than half of the respondents answered that it is due to insufficient income. After retirement, the necessary minimum living expenses and adequate living expenses are divided into two categories. For basic living expenses in retirement, it seems like around 2.51 million won per month would be needed. They are considering around 3.69 million won per month as an adequate living expense, which would include traveling, leisure activities, and giving allowances to grandchildren. Considering the current household income, expenses, and savings capacity among the adequate living expenses of 3.69 million won per month, it is expected that retirement expenses can be met.

The average monthly living expenses in South Korea per household are around 2.12 million won, which falls short of the minimum monthly living expenses of about 2.51 million won by approximately 400,000 won. When preparing for retirement living expenses, the majority of South Koreans utilize the National Pension as the top method, followed by private pensions. Many people believe that pensions will cover a significant portion of their retirement expenses. In the United States, retirement ages can be predicted at 60, 62, 65, and 70. I will now explain why many Americans retire during these periods. Firstly, in the U.S., individuals can start using private pension systems like the 401k and 403k without penalties once they reach the age of 59 and a half. The U.S. private pension system can be seen as a mix of Korea's corporate pension and individual pensions within a certain range.

Inside, it exempts all federal income taxes. In the case of the United States, the higher the income and income tax rate, the more savings are made up to tax-free designation to save taxes. Through 401k, these savings go into funds, and these funds are structured to continuously enter the U.S. stock market, so in the long run, the U.S. stock market can continue to rise. For example, now it's about 1.3 billion dollars with just one million dollars. If you put this one million dollars into a 401k or 403k individual pension, the annual rate of return is about 4%. It amounts to about $40,000 in interest alone. If you have saved diligently until the age of 59 and a half, you may consider retirement at 60. Next is 62. In Korea, it corresponds to the National Pension, while in the United States, there is Social Security. Social Security can be received early from the age of 62.

I mentioned that it is similar to the National Pension, but in our country, the system is that the National Pension deducts 4.5% of my monthly salary, which the company bears, and 4.5% is deducted from my salary, totaling 9% of the monthly salary to the National Pension. However, in the United States, 6.2% is covered by the company, and I contribute 6.2%, totaling 12.4% of the monthly salary, which accumulates as the U.S. National Pension every month. If you retire early, the pension amount decreases. Earlier, I mentioned our personal pension, the 401k, which has enough assets. If a couple each receives their own Social Security separately, they may consider retiring at 62. Most people retire at 65. At 65, Americans retire, which is when the U.S. public health insurance, Medicare, starts. You may know that U.S. health insurance is notoriously bad.

Many people seem to retire at the age of 65, when the burden decreases significantly. However, those who truly want to receive a substantial pension retire at 70. Because if you retire at 70, the U.S. Social Security benefits will be maximized. If you haven't worked your whole life, but focused on household chores after marriage, your spouse will also receive 50% of the pension. This can be received after turning 70. If you claim Social Security before that, you cannot receive it. Once you turn 70, you can receive Medicare coverage and pension benefits, making it the best benefit. That's why many people retire at 70. I would like to talk about the U.S. pension system. Most U.S. pensions are invested in the top 5 companies by market capitalization worldwide. The top 5 companies by market capitalization include Apple as the leader.

Microsoft, Nvidia, Google, and Amazon are American companies. Now, major shareholders are asset management companies in the United States, such as Vanguard, Fidelity, and BlackRock. They own a significant portion of American companies. Asset management companies in the United States invest in American companies with American pension funds. These American companies have total assets ranging from the first to the fifth in the world. BlackRock, the top asset management company, and Vanguard are among them. One of the main purposes is the retirement funds of Americans. According to the Investment Company Institute (ICI), about 32% of U.S. household assets, totaling $38.4 trillion as of the end of 2023, include retirement assets. Through pension funds, individual retirement accounts, and stock investments, Americans indirectly invest in leading U.S. companies to accumulate retirement assets. Well, in the United States, this is the situation.

There is an expression, a millionaire pension. I have a pension of one million dollars. How many people do you think have it? There are 688,000 people. In the case of Korea, 63% of the assets of stores are concentrated in real estate. This is based on the year 2022, but in my opinion, it seems like it would have increased rather than decreased. The annual savings amount for domestic stores is about 200 trillion won, and a significant amount of funds are reinvested in real estate every year. In the United States, the retirement age is increasing to 60, 62, 65, and 70, but the criteria are how I can receive some pension benefits. Compared to using this as a basis for judgment, Korea is not in that situation. Even if I want to work more now, there are no job opportunities. Since retirement planning starts at the age of 45, I think this is a big concern for me. There are really good companies in the United States, so the United States is practically an investment and stock market.

The market is going up, my pension keeps increasing, but I don't think Korea is in that situation right now. Even in our country, in order to retire, we need to manage our assets well. It seems like there should be a social consensus on this issue, and it's a serious time for a discussion on how our national pension should be used. Today's video looked into the retirement age difference and reasons between the U.S. and Korea. I will come back with more videos that will be helpful to you. Thank you for watching today's video.

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A Comparison of Retirement Planning Between Korea and the United States

Pension funds in the US are mainly invested in the top 5 global companies, while Korea has 63% of its assets in real estate.

The average retirement age in Korea is 50.

5 years old, 10 years earlier than the US.

With the shorter preparation period for retirement and more than half of Korean households not started preparing, insufficient income is the main hindrance for retirement planning.

Retirement Expenses and Pension Systems in South Korea and the United States

The average monthly living expenses in South Korea are lower than the minimum required amount, leading to a gap that needs to be covered.

South Koreans rely heavily on the National Pension and private pensions to cover their retirement expenses.

In the United States, the retirement age is often influenced by the ability to access private pension systems like 401k and 403k without penalties, as well as the option to receive Social Security from the age of 62.

Pension System: Contributions, Retirement Age, and Benefits

2% contribution from both the employee and the company, totaling 12.

Americans often consider retiring at 65 when they become eligible for Medicare, but retiring at 70 maximizes Social Security benefits.

Retirees who haven't worked can still receive 50% of their spouse's pension, but only after turning 70.

pensions are invested in the top 5 global companies, with Apple leading the pack.

The Role of Asset Management Companies in American Business and Retirement

Major American companies like Microsoft, Nvidia, Google, and Amazon are significantly owned by asset management companies like Vanguard, Fidelity, and BlackRock.

These asset management companies play a crucial role in investing the retirement assets of Americans into the top U.

The influence of these companies is a key factor in the U.

investment and stock market, while retirement planning and opportunities in the U.

Differences in Retirement Planning Between the U.

market is thriving, leading to increasing pensions, while Korea faces a different situation.

There is a need for a social consensus on effectively managing assets for retirement, sparking a serious discussion on the use of the national pension.

The video explored the variance in retirement age and reasons between the U.

and Korea, highlighting the importance of the topic for viewers.