“Cancel Insurance to Buy Stocks”: South Korea’s Seniors Aged 60+ Are Borrowing Money to Bet on Samsung
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“Cancel Insurance to Buy Stocks”: South Korea’s Seniors Aged 60+ Are Borrowing Money to Bet on Samsung
Time may be the most precious thing for elderly people who borrow money to trade stocks.
Navigating Web3 tides with focused insightsAuthor: Kuli, TechFlow
How wild has the South Korean stock market recently become?
The KOSPI index surged from 4,000 to nearly 8,000 points in just six months. According to The JoongAng Daily, the employee restrooms at a department store in Seoul’s Gangnam District are fully occupied every day at 3:30 p.m.—the market close time—as staff members hide inside to check stock prices.
As of mid-May, margin debt held by South Korean retail investors reached a record high of 36.47 trillion won (approximately RMB 17 billion), doubling year-on-year.
Yet amid this frenzy, the money flowing in feels oddly sourced.
According to The Korea Herald, South Korea’s three largest life insurance companies saw a combined total of 4.9 trillion won (approximately RMB 2.3 billion) in surrendered policies during Q1—a 16.3% year-on-year increase. Savings-type life insurance policies accounted for the sharpest rise, up 23.2%.
Savings-type life insurance is designed precisely to set aside money for one’s family. Surrendering such policies guarantees a loss—the cash surrender value falls below the total premiums paid—yet more and more people are choosing to surrender them at a loss.
Where does that money go? Most likely into another stock trading account.
Data obtained by South Korean lawmakers from the Financial Supervisory Service shows that, as of the end of Q1, retail investors borrowed 27 trillion won from the country’s top ten brokerage firms for stock trading—over 60% (62.3%) of which was borrowed by individuals aged 50 and above.
Debt among those aged 60 and older surged from 3.95 trillion won to 8.02 trillion won in one year—the steepest growth across all age groups.
Surrendering life insurance policies to buy stocks represents an entire generation of South Koreans using their future money to “buy the bottom” today.
Is Borrowing Driven by the Bull Market?
Leverage amplifies gains in bull markets—but accelerates losses toward zero in bear markets. In fact, South Korean seniors have already ridden this rollercoaster once before.
In early March, joint U.S.-Israeli airstrikes on Iran triggered global market panic. South Korea’s stock market hit circuit breakers on two consecutive trading days, with the KOSPI plunging nearly 13%.
According to a late-March report from South Korea’s Financial Supervisory Service, during that sell-off, the average loss among the nation’s 4.6 million retail investor accounts using margin loans stood at 19%, compared to just 8.2% for non-leveraged accounts.Those who borrowed to trade lost over 2.3 times more than those who didn’t.
When broken down by age group, leveraged accounts held by investors aged 60 and above suffered the worst losses—averaging −19.8%, the lowest return across all age brackets.
But even harsher consequences followed: forced liquidations.
Leveraged accounts have a maintenance margin threshold—if the market value of the stocks in the account drops below that level, brokers automatically sell positions without consultation. At the time, the Financial Supervisory Service received numerous complaints from retail investors, including statements like “My stocks were sold without my knowledge” and “I was charged exorbitant interest.”
A significant share of these complaints came from elderly investors—who, unsurprisingly, were unfamiliar with trading rules. That said, retail investors who absorbed the March circuit-breaker shock ultimately emerged victorious.
The Korean stock market fully recovered its losses within just over two months—and kept rising ever since. Those who held through March saw their accounts rebound entirely—and some even turned a profit.
Volatility plus upside potential makes for a successful “getting on board” experience—even if it involved borrowing.
That success then becomes license for bolder bets next time. Following the March circuit breakers, South Korean retail investors’ margin debt didn’t shrink—in fact, it kept climbing. Public data shows that total margin loan accounts hit 25 trillion won by end-April—a new record high—and rose further to 36.47 trillion won by mid-May.
In just six weeks, South Korean retail investors borrowed an additional 11 trillion won (approximately RMB 5.2 billion).
At the individual level: In early May, a South Korean civil servant posted a screenshot on Blind, a Korean workplace community platform:
His account held 2.3 billion won (approximately USD 1.7 million), all invested in SK Hynix—with 1.7 billion won borrowed from his broker. In other words, he contributed only 600 million won of his own capital but leveraged it to borrow 1.7 billion won.
Four days later, he updated his post: he had already earned 267 million won.
On the same day, a 20-something employee at Seoul Metro posted that rather than miss this rally, she’d rather “go completely bust” and invest everything via 150% margin financing in SK Hynix—borrowing funds, then reusing those borrowed funds as collateral to borrow again.
Such posts spark daily discussions across Blind’s Korean community.
Regulators weren’t oblivious to this FOMO-fueled heat. At the end of March, the Financial Supervisory Service convened major brokerage firms to strengthen risk controls; some brokers also temporarily restricted new margin loans on overheated stocks. Yet the money already lent remains outstanding—and accrues interest daily at annual rates of 7% to 9%.
Assuming an 8% interest rate, South Korean retail investors collectively pay nearly 3 trillion won (approximately RMB 1.4 billion) in annual interest to brokers.
Still, leveraging at age 60 differs fundamentally from leveraging at age 30. A 30-year-old who blows up their account still has decades of salary ahead to recover. For a 60-year-old, blowing up means losing their entire pension—leaving only exhausted bodies and the stark reality of no longer being able to earn.
If the next circuit breaker hits, there may be no “recovery within two months” this time.
Taegol Park: Where Seniors Exchange Market Intelligence
Like all South Korean retail investors, the country’s seniors are borrowing to bet on Samsung Electronics and SK Hynix.
Samsung Electronics is up 138% year-to-date; SK Hynix, 189%. The KOSPI overall is up 80%—but excluding those two companies, the remainder rose only 30%.
Together, Samsung and SK Hynix account for over 43% of the KOSPI index weight. In short: when these two rise, the whole Korean stock market rises.
Most of the money seniors borrowed flowed into these two stocks. This year, a full quarter of net retail buying went into Samsung and SK Hynix; the remaining three-quarters dispersed across other stocks—which collectively rose only 30%.
Taegol Park in Seoul’s Jongno District is one of Seoul’s oldest public parks—and rarely visited by young people. Its regulars are retirees who gather each morning for free coffee, casual conversation, and chess—time passing so slowly it seems suspended.
According to Kyunghyang Shinmun, Taegol Park’s topics of conversation have shifted this year.
Midway through coffee breaks, someone might say, “Samsung in my portfolio rose again.” While playing chess, players ask, “Did you buy Hynix?” A 77-year-old man told his middle-school classmate that Samsung and Hynix had been performing well lately—and that he’d made some money in his account.
A corner of Taegol Park teeming with elderly chess players
Source: Seoul News
Yet he didn’t mention whether he borrowed—or how much.
Topics trending among seniors in parks don’t appear out of thin air—they resemble village “information hubs,” where intelligence circulates organically. For instance, one senior hears another made money in the park, checks his own account the next day, tries borrowing a small amount—and eventually borrows more and more.
But why do South Korean seniors show up in leveraged trading accounts in the first place? The answer lies in their retirement security.
According to OECD data, the relative poverty rate among South Koreans aged 65 and older stands at roughly 40%—the highest among OECD member countries. The national pension system’s replacement rate remains chronically low: around 31% in South Korea versus an OECD average of about 50%.
Conversely, labor force participation among South Koreans aged 65+ is the highest among OECD nations—meaning a substantial portion of retirees must keep working after retirement.
Hence, free coffee at Taegol Park functions essentially as social assistance. Priced under 500 won per cup, it constitutes part of everyday life for retirees living on monthly pensions under USD 1,000.
Yet today, seniors at Taegol Park aren’t just gathering for free coffee and chess. Many likely have the KOSPI index open on their smartphones.
Since taking office, President Lee Jae-myung has actively promoted mass stock investing. He publicly refers to himself as a “Big Ant”—“ants” being the colloquial term for retail investors in Korea—and included “KOSPI surpassing 5,000 points” in his administration’s policy goals.
In other words, seniors borrowing to buy stocks is, to some extent, officially encouraged in South Korea.
What seniors are truly betting on is anxiety itself: “If I don’t get on board now, I’ll miss the boat.”
This may be their last chance before retirement. South Korea’s semiconductor industry is cyclical—having undergone multiple sharp swings between boom and bust over the past three decades.
SK Hynix reported a loss of 4.26 trillion won in 2023—the worst performance in ten years. In just two years, it went from massive losses to achieving a quarterly operating profit margin of 72% (surpassing NVIDIA)—a pace of cyclical reversal that itself signals the cycle could reverse again.
And time—perhaps the most precious asset—is what these borrowing, stock-trading seniors can least afford to lose.
The seniors at Taegol Park are striving to capture version-specific tailwinds. The coffee remains free. And the real-time market feed on their phones never pauses.
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