Rising Popularity of ETF Investments in Retirement Accounts and Tax Benefits
Rising Popularity of ETF Investments in Retirement Accounts and Tax Benefits
Among young professionals, there is a growing trend of investing in exchange-traded funds (ETFs) within retirement accounts. Major securities firms like Mirae Asset, Korea Investment & Securities, and Samsung Securities are increasing their ETF proportion in retirement accounts to 20-30%, attracting new clients through expanded financial products and improved transaction convenience. This trend has been boosted by the high returns generated from these retirement accounts, prompting securities firms to enhance customer and risk management. In light of the year-end tax settlement season, there is increasing interest in tax-saving strategies, bolstering the popularity of ETF investments through retirement accounts. In the latter half of the previous year, investments through retirement accounts reached 27.175 trillion won, with ETFs focused on large U.S. stocks standing out due to their particularly high returns. Investors are drawn to tax benefits related to capital gains and dividends, though the government stipulates specific conditions for ETFs admissible in retirement accounts to ensure they serve as tools for forming retirement assets.
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