How does real estate income affect retirement age?: Lessons from national survey of tax and benefit*

Abstract

In Western countries, where retirement funds primarily consist of pensions, research on retirement decision making revolves around pension-related considerations. Conversely, in Korea, where a whopping 77.5% of assets are tied to real estate, little attention has been devoted to exploring the connection between real estate holdings and retirement. This study employs panel models, utilizing data from the 2016-2021 National Survey of Tax and Benefit, to analyze the impact of real estate income on the expected retirement age. The empirical findings reveal that individuals with real estate income tend to postpone their retirement by an average of 2.25 years. Moreover, as both the amount of income derived from real estate and proportion of real estate income in total income increase, the incentives to continue working beyond the traditional retirement age strengthen notably. Given that this study is the first to establish a connection between real estate income and retirement, it is imperative to delve deeper into this topic and uncover further implications through subsequent research endeavors.