National vs Private Pension: Complete Analysis
Which pension gives you more after 30 years? We compare with real numbers.
📋 Contents
1. Key Differences Between Pensions
Pensions are key to retirement planning! Can you rely on national pension alone? Is private pension necessary? Understanding the fundamental differences helps you make smarter choices.
| Category | National Pension | Private Pension |
|---|---|---|
| Enrollment | Mandatory (employees) | Voluntary |
| Contribution | 9% of salary (4.5% self) | Up to 18M KRW/year |
| Return Rate | ~1-2% (low) | 3-7% (variable) |
| Tax Benefit | Contribution deduction | Up to 1.485M KRW/year |
| When to Receive | From age 65 | From age 55 |
2. 30-Year Compound Effect Simulation
Let's calculate expected pension for Employee A (35 years old, 4M KRW monthly salary) over 30 years.
📊 Simulation Conditions
- • Current age: 35
- • Monthly income: 4M KRW
- • National pension: 180K KRW/month
- • Private pension: 300K KRW/month additional
- • Contribution period: 30 years
National Only
~980K KRW/month
- • Total paid: 64.8M KRW
- • Start receiving: age 65
- • Replacement rate: ~24.5%
National + Private
~1.87M KRW/month
- • Total paid: 172.8M KRW
- • Private savings: ~180M KRW
- • Replacement rate: ~47%
3. Tax Benefit Analysis
The biggest advantage of private pension is the tax credit. You can get back up to 1.485M KRW depending on your salary.
| Annual Salary | Credit Rate | Max Credit (Pension) | Max Credit (with IRP) |
|---|---|---|---|
| ≤55M KRW | 16.5% | 66만원 | 148.5만원 |
| >55M KRW | 13.2% | 52.8만원 | 118.8만원 |
4. 5-Step Optimal Pension Strategy
Maintain National Pension
National pension is the best insurance against longevity risk.
Fill Pension Savings First
Get tax credits up to 4M KRW annually.
Additional IRP Contribution
Get additional tax credits up to 7M KRW.
Diversify Receiving Timing
Private pension from 55, national from 65 to cover the gap.
Regular Review
Review and adjust your pension portfolio at least annually.
5. Calculate Your Pension
Use the calculators below to plan your personalized pension strategy.