[Insight & Opinion] Portfolio Life for Employees: Designing a Pension-Plus-Work Lifestyle

All employees eventually become independent. The late management author Gu Bon-hyeong advocated for hiring oneself. Management thinker Charles Handy proposed the concept of a portfolio life, emphasizing that what matters in life is not the balance between work and life, but the ‘balance of work.’

Considering that Gu Bon-hyeong and Charles Handy’s advice was given in the early 2000s, their insightful perspectives are worth revisiting. The time when their advice becomes even more urgent seems to be now. This is because the baby boomer generation, which accounts for one-third of South Korea’s population, is rushing into retirement. It is the first time in modern Korean history that so many people have left their main jobs over a period of about 30 years.

At some point in the future, every employee must hire themselves and create their own life portfolio. Handy mainly focused on work in his portfolio life concept. According to him, a good work portfolio includes several types of work: paid work, studying, appropriate household chores, volunteering, and other suitable types of work combined to form a portfolio. Ultimately, Handy believed that we are all portfolio workers.

I would like to add a few points to Handy’s idea. Let’s consider including financial matters along with work in the life portfolio. Among retirees in their 50s in South Korea, the biggest regret for those who were unprepared before retirement was ‘financial management’ (according to a survey by Mirae Asset Investment and Pension Center). They regretted not contributing more to pensions or investing in stocks or funds. Financial management ranked higher than work, relationships, or even health.

One life portfolio approach that combines work and money is the concept of a ‘pension-plus-work life.’ It encourages living a life where one receives a pension while continuing to work. Here, ‘pension’ does not necessarily refer to a system or financial product named pension. It means all assets that generate cash flow. Few people can sustain their retirement solely on cash flow from their assets. Therefore, a realistic portfolio strategy is a combination of appropriate income from work and cash flow from existing assets. The idea is to move away from relying solely on one job (workplace or profession) or money for retirement and to consider a combination of both.

Work is also a way to express one’s identity beyond income. Before retirement, the work done at the workplace revealed one’s identity, but after retirement, as Handy advised, it is necessary to define one’s identity in various ways. One should subdivide their roles?work, family roles, hobbies or leisure activities, relationships, volunteer work?and define their identity accordingly. Life after retirement should shift from a single job and identity to a diverse combination of identities.

At some point, every employee will live an independent life, create their own life portfolio, and hire themselves. As Handy said, we are all portfolio workers, and ultimately, we should live a pension-plus-work life. Starting now, let’s take time to contemplate and think about our life portfolios.

Lee Sang-geon, Director of Mirae Asset Investment and Pension Center