Korean Job Discussion Forums

[GwangjuParents]

From Garth Turner's blog:

[Fox]

More realistically, people are going to have to stop retiring at 60. Most people aren't going to have over a million dollars in assets by the time they hit 60. That's just not going to happen.

Longer lives means working longer.

[misher]

I've just accepted the reality that I won't be retiring at 60. I will probably be involved in some kind of employment until I'm 70+. Based on what I've been reading, the whole "set for life" pension scheme that public servants are given is finished for the generation X and younger crowd.

[Trevor]

I am sort of apocolyptic in my long term thinking. I think it is very likely that the world population is going to be drastically reduced in our age. I am not convinced that finances should be our main concern. For Americans, I think it is a joke to make any pretense of depending on S.S. As for investments, I see no great stability there, either. What if you invest wisely all your life and the markets crash?

I'm living day to day...I have some money saved, but it looks like a corrugated tin shack in Thailand is going to be my "retirement".

[mises]

Retirement is going to be difficult for most. I suppose we'll see a trend of parents moving in with kids, as it used to be.

Here is a great site on this issue of underfunded pensions:

http://pensionpulse.blogspot.com/

[Ya-ta Boy]

Here's a question for financial gurus:

Last summer I turned 60 so my employer informed me that they no longer have to pay into the Korean National Pension Plan. I went to the office and found that to be true.

They said I could continue to contribute ~W300,000 a month until 2015 and then get a monthly dispersement of ~W300,000 a month for the rest of my life. The only advantage I see is that it would be reliable and no one could take it away from me.

The other alternative is to take out what I've accumulated so far and invest it...and keep my fingers crossed.

I need to make a decision by next week. Any thoughts?

[Ya-ta Boy]

Addendum:

I should probably mention this W300,000 would NOT be my only retirement income. When I think about it, I see it as (potentially) a reliable way to pay for my monthly food bills.

[VanIslander]

[blade]

[Kuros]

[bacasper]

How long are you planning to live?

[Ya-ta Boy]

Well, my dad only made it to 70 but my mom is still going at 85. By my calculations, I would have to make it to 72 1/2 to get my investment back and start making a 'profit' (if I retire at 65). I haven't really made up my mind about when to retire. I think it's entirely reasonable to raise retirement age to 70, although young people trying to get into the work force may not agree with that. (I'm not sure if my present employer would allow me to do that. I had to pull strings to get them to hire me in the first place--they said they 'were worried about your age'. )

The majority seem to be saying to play it safe and take the pension option.

Would it affect anyone's opinion if I said my mutual fund is making about 25% right now?

[jaykimf]

I think it's impossible to say without knowing how much you already have invested in the plan. If you took the money out now and invested it in a mutual fund and added 300,000 a month for 5 years, what would your total investment be worth? You may have gotten a return of around 25% this year, but over the long run that kind of return is basically impossible. A return of about 8-10% a year is more reasonable to expect. And five years is a relatively short time frame, so your actual return might vary considerably from the long term average. It could be more or less. But if you assume an 8-10% ARR, how much would you have in 2015? And 8-10% of that amount would yield how much per month? Then besides the yield, at some point you could consider drawing down on the principal.

Of course there are those who believe we are in a suckers rally and the market is going to go much much lower resulting in a negative return on your mutual fund. I don't think that is likely (although inevitably there will be market corrections) but I am not presumptuous enough to say that I KNOW what the future will bring. Personally I think 8 -10% ARR over the long run is reasonable.(Nothing wrong with hoping it will do better --as long as you're not counting on it.) Obviously others disagree. To compare your 2 choices you really have to estimate what kind of return you get on your investment and also consider the likely hood of your actually getting that return. My guess is that if you already have a considerable amount in the pension you might be better off taking the money and investing yourself. On the other hand if there is not much in there you might be better off with the fixed return. You'll have to make your best guess about what kind of return you can get and then crunch the numbers.

[bacasper]

How do you figure 72 1/2? Counting from now, you must pay for four years more, so to recoup that you need only to live to 68. Are you overweight? a smoker? Hypertense? Any risk factors? If not, it sounds like you should take it.

[bucheon bum]