Retire In South Korea With $200,000 Of Savings?

Could it be done – retirement in a modern, technology-driven country like South Korea on savings of just $200,000? Considering that the average Social Security income of a U.S. retiree is over $1,300, the answer is yes! That $200,000 sum is much less than financial advisors recommend; it’s also much, much more than the average retiree is able to save.

According to U.S. News & World Report, the National Institute on Retirement Security recently found that 45% of working-age households have no retirement savings at all. Among people 55 to 64, average household retirement savings total only $12,000. (You may benefit from reading Investopedia's tutorial on Retirement Planning, particularly the article How Much Will I Need?)

So if your savings really amount to $200,000 you are way ahead of most of your peers. But even so, you’ll almost certainly be a lot happier (financially, at least) abroad than in the United States. (See Retirement: U.S. Vs. Abroad. And while you are making retirement plans, research other options such as Retire In Viet Nam with $200,000 and Find The Top Retirement Cities In Cambodia.)

While some costs in South Korea are nearly as high as in the United States, the cost-of-living indexes (80.14 compared to NYC at 100 according to Numbeo on a late May day in 2015) somewhat lower, and there are certain compensations. You’ll undoubtedly have a faster internet connection there than you’ve ever experienced and it might cost a lot less. Reports are that even way down in the subway there is TV reception on cell phones. Such speeds and such high technology could be a big help in communication with your family and friends back in the U.S. These advantages would also help make it easier to do any kind of part-time work you might have set up back home.

Eating Out as a Culinary Adventure

Also, living in such a vibrant economy has its own delights. Koreans eat out a lot and therefore there are lots of restaurants, from noodle shops to places for fine dining, as well as many food carts. In fact, some say food in restaurants (or one the street) is less expensive than food in grocery stores. Korean cuisine is varied and delicious. Kimchi (spicy pickled vegetables) is served with most dishes and is Korea’s best-known contribution to world cuisine. In Korean homes, there are even special Kimchi refrigerators to conserve home-made versions of the side dish for a long time.

Koreans are a hospitable people, too. There is an __EXPRESSION__ covering celebrations at home that talks about “breaking the table legs.” It refers to the fact that Koreans expect hosts to cover the table with serving dishes heaped with food. When they’ve done that, the occasion is a success. Since, according to all accounts, Koreans are a friendly people, you can look forward to such invitations when you retire there.

Good Transportation Is a Plus

There’s also an excellent and inexpensively-priced public transportation system, so you might consider living outside the center of Seoul or another big city, where it’s less expensive to live than it would be right in the center. (According to Numbeo, a one-bedroom apartment in Seoul averages US$1,122.31 a month in rent; while a similar apartment outside the center would be just US$689.02 a month.) Of course, everything in South Korea is priced in KRW, the South Korean won, of which there are at the present time, .00090 to the U.S. dollar. Those zeros are important in this case.

Retirement Income CalculationsKorea is a center of airline traffic and n ideal place from which to explore the rest of Asia. Obviously it’s much cheaper to visit Thailand, Malaysia, China and Japan from Korea than from the U.S. And you will be able to easily travel around South Korea itself, which is not a large country but has many beautiful spots, including beautiful beaches (but they are not year-round delights, as the winters tend to be long and cold).

Some basic math shows that even if you add as much as US$800 per month to your Social Security income. your $200,000 cash savings account would last about 21 years ($200,000 ÷ $800 = 250 months, or 20.8 years). So, assuming you can live within your Social Security income except for occasional travel and surprise expenditures, you should be fine in this vibrant, modern country. Of course, no one can guarantee how long you’ll live or what expenses will be in the future, but with a strong dollar, you can be way ahead of the game.

There’s been talk of creating retirement visas in South Korea, but it hasn’t happened yet. And South Korea is not the retirement target for Americans that Japan, China or Hong Kong is, so far. Americans must rely on three-month visas, but Canadians are eligible for six-month stays, by the way. The visas can be renewed at the border, which is never too far away, since South Korea is not a huge country. Tour operators based in South Korea will often offer services specifically for expatriates attempting to extend their stay, and will generally offer free online advice, according to Escape Artist. According to that same website, there are nevertheless quite a lot of Americans who have chosen to retire there, certainly enough to form a community. Before they leave home, many Americans prepare to teach ESL (English as a second language) – a possible extra source of retirement income, what with Koreans’ recent interest in English (how could that not happen in a techie country?). More and more Koreans speak some English, in fact.

The National Tax Service publishes the "Easy Guide for Foreigners' Year-end Tax Settlement" each year. You can find copies in the tax offices, at expat information centers, in some banks, and on-line. In spite of the increase in English speakers, it’s also a good idea to study some Korean before you go, since signs of most kinds are in that language only. It takes a little study time to decipher signage in such a very different written language well enough to get around confidently. Also, Koreans, like all peoples, like visitors to make an effort in overcoming language barriers.

Retirees: Expect Some Respect

As an older person, you can expect some respect in Korea, unlike the customary treatment in the U.S. According to The Week magazine (2), “Not only do Koreans respect the elderly, but they also celebrate them. For Koreans, the 60th and 70th birthdays are prominent life events, which are commemorated with large-scale family parties and feasts. As in Chinese culture, the universal expectation in Korea is that roles reverse once parents age, and that it is an adult child's duty — and an honorable one at that — to care for his or her parents. A simple daily event like riding public transportation is also subject to this tradition: Out of respect for the elderly, young people usually give up their seats for an aged person on a crowded bus or subway train.

The Bottom Line

The trail of expats leading here is not so well trod as to some other Southeast Asian countries, but with an average sized Social Security payment plus a nest egg of US$200,000, you should be okay living in this bustling, modern country.