Korea Investment Trust Management Publishes ETF Retirement Investment Guidebook

'Pension Millionaire's ETF, Ace' Published
"Essential Information by Age and Account at a Glance"

Korea Investment Trust Management announced on the 13th that it has published a pension investment guidebook using exchange-traded funds (ETFs) titled "The Pension Millionaire's ETF, ACE."

This guidebook was created in response to the recent increased demand for ETFs within pension accounts. According to the guidebook, more than half (52.0%) of the 2030 generation who have started preparing for retirement chose ETFs as their private pension management method, and accordingly, the ETF balance within pension accounts has steadily increased.

The guidebook contains information on the tax benefits of investing in ETFs within pension accounts and details on ACE ETFs available for investment through pension accounts. It also includes Q&A on ETF pension investment tips by age group and how to utilize pension accounts, making it a practical manual for actual investment.

The representative tax benefit of investing in ETFs within pension accounts is "tax deferral." For overseas equity and other ETFs excluding domestic equity ETFs, a dividend income tax of 15.4% is imposed on capital gains and dividends when traded in general accounts, but pension accounts defer all taxation until the withdrawal point. Assuming receiving 5 million KRW in dividends annually for 30 years, the profit difference due to tax deferral reaches 100 million KRW.

The guidebook also organizes at a glance the ACE ETFs available for investment by pension account type. Pension accounts are divided into pension savings (individual pension) and retirement pensions (defined contribution and individual retirement pensions). The guidebook presents the investment limits for risky assets and products available for each account in tables, and in retirement pension accounts, synthetic ETFs excluding futures-type, leveraged, and inverse products can be invested in.

In the ETF pension investment tips by age group, recommended ACE ETFs are suggested considering income and remaining investment period by age. For example, for those aged 20-35 with low income and a distant retirement point, a strategy of investing in high-growth assets to prepare a lump sum in the future is recommended. Recommended investment strategies and products by age group can be found in the guidebook. Korea Investment Trust Management's pension investment guidebook "The Pension Millionaire's ETF, ACE" can be downloaded for free from the ACE ETF website and blog.

Kim Chanyoung, Head of Digital ETF Marketing Division at Korea Investment Trust Management, said, "In the soon-to-come 120-year era, as the period without income after retirement lengthens, investment methods to prepare a lump sum will be more important than principal-guaranteed products," adding, "We hope this guidebook will serve as a reference for related ETF investments."