Who Will Prepare for My Retirement When 180 Million Won Is Needed for My Child's Wedding?

Child-Related Expenses Exceed Retirement Benefits, Creating Financial Pressure
Heavy Reliance on Public Pensions, but Replacement Rate Remains at Only 22%

A recent survey has found that a significant number of people in their 40s and 50s who are nearing retirement believe they are not adequately prepared for their later years.

According to the "2025 KIDI Retirement Market Report" published by the Korea Insurance Development Institute on January 7, 90.5% of respondents in their 40s and 50s said they felt the need to prepare for retirement. However, only 37.3% rated their actual level of preparation as 4 points or higher on a 5-point scale, indicating that more than 6 out of 10 consider themselves insufficiently prepared.

Many respondents also said that the financial burden of their children's education and wedding expenses would continue even after retirement. The expected average education cost per child was 46.29 million won, and the average wedding cost was 136.26 million won, meaning a total additional expenditure of about 180 million won per child would be needed.

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In contrast, the average retirement benefit that people in their 40s and 50s are expected to receive upon retirement was only 167.41 million won. More than 75% of respondents said they planned to use this retirement benefit for living expenses after retirement, and the analysis found that considering the additional burden of supporting children, there is a high possibility of a financial gap.

Retirement funding was found to be heavily dependent on public pensions. Among respondents in their 40s and 50s, 69.5% cited public pensions as their main source of retirement funds, while only 6.8% said they were utilizing private pensions. According to the Korea Insurance Development Institute's analysis of National Pension Service statistics, as of 2024, the income replacement rate for old-age pension recipients was estimated to be about 22% of their average monthly income before retirement.

The report highlighted the need to promote private pensions. Survey results showed that 54.9% of office workers in their 30s to 50s hoped for an increase in the tax deduction limit, with the desired average limit at 12.58 million won-more than double the current 6 million won. Since tax benefits for pension savings shifted from income deductions to tax credits in 2014, insurance companies' pension savings premium income has decreased from 880 billion won to 450 billion won over the past decade.

Heo Chang-eon, President of the Korea Insurance Development Institute, emphasized, "As post-retirement life has become longer, a multi-layered approach to retirement preparation that considers both pensions and coverage is essential."