[2021 National Audit] Over 70,000 People Withdraw Retirement Pensions Early Due to Housing and Living Hardships

Assemblyman Jeon Jae-su "Need to Check Risks for Retirement Preparation"

Jeon Jae-su Assemblyman

[Asia Economy Reporter Kwangho Lee] The number of workers who withdrew their retirement pensions early exceeded 70,000 last year. The total amount is estimated to be about 2.6 trillion won.

According to data submitted by the Financial Supervisory Service to Jeon Jae-su, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, the number of early withdrawals from retirement pensions increased from 40,091 in 2016 to 71,931 in 2020, a 1.8-fold increase.

During the same period, the amount of early withdrawals rose from 1.2317 trillion won to 2.6341 trillion won, a 2.1-fold increase.

As of last year, more than half of the early withdrawals were due to housing issues, with 62.3% of the withdrawn amount related to real estate reasons such as home purchases and rental deposit for housing purposes.

Withdrawals due to financial hardship, including long-term care, bankruptcy declarations, and rehabilitation procedures, accounted for 36.3%, while other reasons made up 1.3%.

Notably, the amount of retirement pension early withdrawals due to financial hardship has increased particularly among those in their 40s and 50s.

The retirement pension early withdrawals due to financial hardship by people in their 40s and 50s rose from 372.9 billion won in 2016 to 670.3 billion won in 2020, an increase of 79.8%.

Assemblyman Jeon said, "It is necessary to establish various social safety nets that can guarantee a dignified life without having to withdraw retirement pensions early, and to assess the risks of retirement preparation that depend on real estate prices."