South Koreans in Their 40s and 50s Turn to Treasury Bonds for Early Retirement Security (Image courtesy of Yonhap)
SEOUL, Sept. 16 (Korea Bizwire) — A growing number of South Koreans in their 40s and 50s are turning to individual Treasury bonds as a preferred tool for retirement planning, according to new data from Mirae Asset Securities, the sole distributor of the instruments.
Figures show that 39.3 percent of investors in such bonds over the past year were in their 50s, followed by those in their 40s at 21.7 percent, meaning more than 60 percent of buyers are middle-aged. Another 19.1 percent were in their 60s. By contrast, investors in their 30s and 20s accounted for just 7.5 percent and 3.8 percent, respectively.
The bonds, first issued in June 2024, guarantee repayment of principal and interest, making them particularly attractive to investors seeking stability. Survey data suggest 63 percent of investors cited retirement preparation as their main motivation, while 26 percent pointed to diversification and safe-haven investing.
One of the key draws is tax treatment. Interest income up to 200 million won (about $146,000) is subject to a flat 14 percent tax rather than progressive income tax rates, an incentive especially appealing to high earners. Investors also highlighted security (31 percent) and competitive rates (27 percent) as major factors.
Reinvestment has been common: more than 60 percent of investors subscribed at least twice, averaging nearly four reapplications per person. About 11 percent invested ten times or more. Although early redemption became possible in July, requests have remained low, representing only 1 to 1.5 percent of total issuance in the first two months.
Still, financial experts caution that the bonds have limitations. Unlike conventional bonds, they cannot be traded for capital gains before maturity, and early redemption forfeits tax benefits and additional interest. Nor can they generally be transferred to heirs, unlike some foreign government bonds that allow intergenerational transfers without gift tax.
The trend underscores how South Koreans are starting retirement planning earlier, turning to government bonds as a rare combination of predictability, tax efficiency and security in an aging society grappling with economic uncertainty.
M. H. Lee (mhlee@koreabizwire.com)
