[2020 Gold Age] John Lee "Prepare for Retirement by Investing in Stocks from a Young Age"

Our Publication Hosts '2020 Gold Age Forum'
"Lack of Financial Education and Stock Prejudice Must Change"

John Lee, CEO of Meritz Asset Management, is delivering the keynote speech at the 2020 Gold Age Forum held at the Banking Hall in Jung-gu, Seoul, on the 9th. Photo by Moon Honam munonam@

[Asia Economy Reporters Song Hwajeong, Lee Minji] "Prepare for retirement from a young age."

John Lee, CEO of Meritz Asset Management, emphasized on the 9th that to ensure a stable retirement, one must start preparing early and invest long-term in stocks and funds.

Lee attended as a keynote speaker at the '2020 Gold Age Forum' hosted by Asia Economy at the International Conference Room of the Bankers' Hall in Jung-gu, Seoul, stating, "43.8% of retirees in Korea consider themselves to be in poverty," and "7 out of 10 regret not saving enough for their retirement."

He cited the lack of financial education as the reason Koreans are unprepared for retirement. Lee said, "In Korea, children are not taught about money," and pointed out, "Korean education does not teach capitalism, so the absence of financial education hinders retirement preparation." He also identified private education, cars, insurance, and lifestyle habits as reasons why Koreans fail to become wealthy. He argued, "Excessive spending on private education and a strong desire to own cars exist," adding, "If that money were invested in stocks, one could become wealthy and prepare for retirement."

He also mentioned that misconceptions about stocks are a factor blocking retirement preparation. Lee explained, "In Korea, people are taught not to invest in stocks, which is a very wrong perception," and added, "This is because stocks are thought of as something to buy and sell, but stocks are something you hold." He emphasized, "Retirement preparation is about changing your lifestyle and realizing that money should work for you," and "Making money work is precisely stock investment." Furthermore, he added, "It is important to invest in stocks or funds steadily over a long period."

Lee proposed the 4% rule for retirement preparation. He said, "If you need 1 billion won at retirement, consider 4%, which is 40 million won, as your annual living expenses and invest without fail until you accumulate that amount," and "If you spend 4% of your assets as living expenses per year, you don't need to worry about retirement for over 30 years."

Lee urged, "To prepare for retirement, first spend money on yourself, but invest that money in stocks or funds and start today." He said, "Assuming an expected annual return of 7% on a stock portfolio and investing 500,000 won monthly until age 30, a person who started at age 0 can accumulate 610 million won by age 30, at age 10 can accumulate 260 million won, and at age 20 can have 90 million won," explaining, "This is why it is important to start investing early for retirement preparation."

Lee stressed, "To prepare for retirement, you should now subscribe to pension savings funds, convert expenses on private education and cars into investment funds, and invest steadily with spare money every day."

Na Jaecheol, Chairman of the Korea Financial Investment Association, in his congratulatory remarks on the same day, urged active use of various financial investment products for retirement preparation in the low-interest era. Chairman Na said, "The old age of a fool is winter, but the old age of a wise person is a golden age," and added, "Considering the forecast that the proportion of the elderly aged 65 or older will exceed 20% in six years, asset management to welcome the 'golden old age' is more urgent." He emphasized, "In the low-interest era, it is necessary to actively utilize various financial investment products such as funds rather than focusing on 'principal-guaranteed safe assets' as before," and cited the introduction of an advanced retirement pension system as one of the alternatives. Chairman Na said, "Previously, the focus was on stable management aiming at 'post-retirement livelihood security,' but going forward, it is important to find a new balance between stable management and appropriate returns," and stressed, "For this, the introduction of an advanced retirement pension system is absolutely necessary."