"1 million won every month for 10 years"... The 'Ten-Ten Formula' to create 2.19 million won per month for retirement

For those who feel burdened by the need to accumulate massive assets for retirement preparation, a plan to increase pension payouts through efficient asset management methods has been presented. In a video, CEO Song Yeong-uk explained the so-called 'Ten-Ten Formula,' which involves accumulating 1 million won every month for 10 years and then leaving it untouched for an additional 10 years.

With the 'Ten-Ten Formula' applied, it is possible to receive 2.19 million won per month starting from age 70

The 'Ten-Ten Formula' named by CEO Song Yeong-uk is a method of accumulating 1 million won per month for 10 years during periods of high income, and then leaving it for another 10 years instead of withdrawing it immediately. CEO Song explained that if one accumulates 500,000 won per month for 10 years starting from age 50 and manages it with an annual return of 7%, it will become 170 million won at age 60, and if left for another 10 years until age 70, it will become 340 million won. Using this fund, the calculation shows that one can receive approximately 2.19 million won every month for 30 years from age 70 to 100. He added that if one starts this method from age 40 and secures 660 million won at age 70, one can receive approximately 4.31 million won every month until age 100.

Utilizing ETFs and account strategies to achieve a 7% annual return

CEO Song suggested ETFs (Exchange Traded Funds) as a means to achieve an annual return of 7%. Citing past cases, he mentioned that the Nasdaq recorded an average annual return of about 14% over 40 years, the S&P 500 recorded 10%, and the KOSPI 200 recorded about 8%, explaining that a 7% return is fully possible if one invests in index ETFs or growth-oriented ETFs. In particular, he emphasized that ETFs have a diversification effect as they are invested in 20 to 50 stocks, and if invested through monthly installments, short-term risks can be defended.

Methods for utilizing accounts to increase the efficiency of asset management were also mentioned. CEO Song advised distinguishing and using ISA (Individual Savings Account) and pension accounts according to age groups. For the younger generation, it is advantageous to focus on using ISA accounts, which allow for tax-free withdrawals, considering situations with a high possibility of intermediate withdrawals such as preparing for housing or child education funds. For those in their 40s and 50s, he explained that it is good to use pension savings or IRP (Individual Retirement Pension) which offer tax credit benefits. He explained that pension accounts allow for a tax credit of up to 9 million won per year, meaning one can expect a refund of approximately 1.48 million won every year, and profits can be maximized through tax deferral and low-rate taxation benefits.

Three conditions to secure 5 million won per month in retirement

CEO Song presented three conditions to secure a monthly income of 5 million won or more in retirement. The first is to maintain a professional life for 30 years to secure the National Pension and retirement pension. The second is to utilize pension accounts that receive annual tax benefits of 9 million won by accumulating 750,000 won every month. The last third condition is to prepare an owned home before retirement. CEO Song explained that if these conditions are met, it is possible for anyone to create a monthly income of 5 million won or more.