Calculate Living Expenses from Actual Spending
Using a percentage of your current living expenses is only a starting point. From your spending over the past year, identify costs that will remain after retirement—such as housing, food, insurance premiums, taxes, and medical expenses—and calculate the monthly average. Record the expected timing and amount of expenses that do not occur every year, such as replacing a car or repairing your home, and account for inflation as well.
Check Your Estimated National Pension
You must have at least 10 years of coverage to receive the old-age pension, and the starting age varies by year of birth. The monthly amount depends on factors such as your coverage period and income during enrollment, so it is difficult to estimate your personal amount from the average benefit alone. Check your individual estimated pension amount through the National Pension Service, and decide whether to start early or defer benefits by considering both your immediate living expenses and your lifetime benefit amount.
Review Your Retirement Pension and Personal Pension Savings
First, check the type of your employer-sponsored retirement pension, your current balance, and the fees charged by the investment products. Contributions to personal pension savings may qualify for a tax credit up to 6 million won per year, or up to 9 million won per year when combined with a retirement pension account. The actual credit rate varies depending on income and other conditions, and different taxes may apply to early withdrawals or payments taken outside the form of a pension, so check the National Tax Service guidance.
Match Asset Allocation to When You Need the Money
Rather than setting your stock and bond allocation based only on your age, separate living expenses you will need within five years from money you can leave invested for longer. It is generally better not to concentrate near-term spending money in assets with high price volatility. For each investment product, review the risk of losing principal, fees, and currency risk, and regularly check that you are not overly concentrated in a single asset or region.
Review Debt and Housing Costs
Prioritize your loans by recording their interest rates, maturities, and monthly payments after retirement. Paying off every debt first is not always the best answer, but high-interest debt can significantly reduce your cash flow. For a housing pension, at least one spouse must be 55 or older, and the combined assessed property value and other conditions must meet the current requirements. As of the 2026 기준, the combined assessed-value limit is 1.2 billion won, while the actual monthly payment varies by age, home value, and payment method.
Prepare for Income Gaps First
There may be a gap between your retirement date and the date you begin receiving public pension benefits. Calculate whether you should set aside living expenses and health insurance premiums for this period in a separate account. Treat income from reemployment or a small business conservatively rather than counting it as guaranteed income, and include scenarios involving startup costs or declining sales.