A survey showed that twice as many elderly homeowners are now unwilling to bequeath their homes to their children as in 2008. It also found that more than half of them have not saved enough for retirement. Most elderly who intended to use JooTaekYeonKeum (JTYK) answered that they selected JTYK to avoid imposing any financial burden on their children.

On the 29th, Korea Housing Finance Corporation (HF, CEO Kim Jae-Chun) announced the findings of the "2016 JTYK Demand Survey," which was conducted jointly with a research agency to ascertain actual living conditions of retirees. This survey was conducted from June 27 to August 12 on 3,000 elderly homeowners aged 55 to 84 and 600 JTYK subscribers.

* JooTaekYeonKeum (JTYK) is a government-guaranteed reverse mortgage loan in which senior citizens aged 60 or older provide their owned homes as collateral and receive living funds for retirement in the form of monthly pension benefits either for the rest of their lives or for a certain period of time.

□ Nearly twice as many elderly are less willing to leave their homes to their children as in 2008

One out of four elderly homeowners aged 60-84 (25.2%) answered that they were reluctant to pass on their homes to their children through inheritance, up nearly double from 12.7% in 2008.

Four out of ten younger cohorts of elderly Koreans aged 55-59 (39.1%) responded that they would not leave their homes to their children, showing that younger segments of the elderly population are less willing to bequeath their homes to their children.

□ JTYK selected for financial independence

The most common reason for intending to use JTYK that respondents cited was not wanting to receive their children's help with living expenses, followed by having no other way to raise money for retirement, and wanting to enjoy a better quality of life.

□ Only four out of ten elderly homeowners are prepared for retirement

The survey showed that only 43.5% of general elderly homeowners were able to pay their monthly living expenses in retirement. It was found that they had started to prepare for retirement at age 48 on average. Only 16.7% of JTYK subscribers, however, have prepared for retirement, and they started to prepare at age 54, showing that they started later than general elderly homeowners.

□ 22.9% of respondents aged 55-59 use mortgage loans, a higher percentage than general elderly homeowners

- Subscription of JTYK for repayment of mortgage loans expected to increase

The survey pointed out that the usage rate of mortgage loans was 22.9% for those aged 55-59, which is higher than that for general elderly homeowners aged 60-84 (13.7%). Those respondents aged 55-59 living in Seoul and its vicinity who own homes worth more than KRW 400 million showed an especially high usage rate of mortgage loans.

According to the survey findings, homeowners aged 55-59 were more willing to subscribe to JTYK than other elderly. It is expected that they will subscribe to JTYK for mortgage repayment in retirement to relieve their mortgage repayment burden.

* The JTYK for Mortgage Repayment is one of three options of the HF Reverse Mortgage Package launched in April. It allows senior citizens 60 years of age or older, who are repaying mortgage loans, to pay back their existing mortgage loan in a lump sum and to convert the option to JTYK to receive monthly payments on the remaining value of their home.

□ Current assets not enough for later life

The survey found that 41.7% of general elderly homeowners feel that their assets are insufficient for retirement. The average assets of general elderly households totaled about KRW 390 million, while the required assets for retirement were KRW 570 million. They hold about KRW 51.9 million in financial assets on average, which accounts for about 13.2%, indicating that most of their assets are real assets.

The desired monthly income for general elderly households was KRW 2.81 million, but their actual average monthly income was KRW 1.79 million, which is KRW 1.02 million short of the desired amount. It was found that if they subscribe to JTYK, the monthly payouts will cover part of the shortage in funds for living expenses.

□ Elderly population not actively participating in financial education for retirement preparedness

The survey indicated that only three out of 100 elderly homeowners have participated in financial education programs for retirement planning. Even most of those who have done so only had one session. More than 30% of the respondents said that such education is necessary, indicating that their participation in financial education is very low compared to the need for it.

An HF official said, "HF presently runs the six-week Retirement Finance Academy about economics and finance for (prospective) retirees. It gives the elderly practical information on asset management and financial instruments for retirement."