"Even 200 Million Won in Savings Could Be Wiped Out by Medical Bills"... Americans Struggle to Save the Average 2.8 Billion Won Needed for Retirement

Even Wealthy Americans Struggle to Save for Retirement
Retirement Savings Target: "KRW 3.5 Billion"... Medical Costs Up 7.5% in One Year
3 in 10 Wealthy Americans: "My Own Retirement Comes Before Inheritance"

Even Americans with substantial assets have not saved enough to meet their financial needs after retirement.

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"You Need 3.5 Billion Won to Retire"...Americans Have Saved Just 52% of That

According to Fortune, a U.S. business magazine, a survey conducted by HSBC of U.S. investors with at least $100,000 in investable assets (about 130 million won) found that respondents estimated they would need an average of $2.6 million (about 3.5 billion won) for retirement. That is 26% more than a year earlier. By contrast, they had saved only 52% of their target retirement amount.

The situation was not much different for Americans generally. In a BlackRock survey, Americans said they would need about $2.1 million (about 2.8 billion won) for retirement. However, 62% of respondents said they had saved less than $150,000 (about 200 million won). Although the surveys differ in their subjects and methods and cannot be directly compared, the findings suggest that ordinary households also face a substantial gap between what they will need in retirement and the assets they actually have.

In the HSBC survey, baby boomers had the highest savings rate relative to their retirement target, at 74%. The rate was 55% for Generation X, while Millennials and Gen Z had saved just 42% and 45% of their targets, respectively. Younger generations have the advantage of having more time to save, but if the amount needed for retirement rises rapidly, they may find it difficult to reach their targets.

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With Healthcare and Long-Term Care Costs Rising, 31% of Wealthy Respondents Say "I'll Prioritize My Retirement Over an Inheritance"

Healthcare costs after retirement are also cited as a factor making it harder to prepare for old age. Fidelity estimated that the average medical expenses after retirement for someone retiring at age 65 this year would be $185,500 (about 250 million won), up 7.5% from last year. Analysts say retirement targets may continue to rise, as people must account not only for living expenses but also for healthcare and long-term care costs.

Views on inheritance are also changing. In the HSBC survey, 31% of wealthy respondents said they would prioritize expenses such as their own long-term care over passing their assets on to their children. Concerns about being unable to cover healthcare and care costs in old age appear to be prompting people to prioritize their own well-being and living expenses over the inheritance they leave their children. Such responses may become more common as healthcare and long-term care costs rise.

Fortune reported that the CEO of the Transamerica Institute warned that a "perfect storm" was hitting the U.S. retirement market. A perfect storm refers to a situation in which several adverse factors converge, amplifying their impact. As retirement savings targets rise while savings fail to keep pace and healthcare costs mount, Americans are finding it increasingly difficult to prepare for old age.

This content was produced with the assistance of AI translation services.