How To Save My Retirement Money From Korean IRP
After seven years of waiting, planning and a little crying, I am finally a millionaire… in South Korean won, that is.
A few months ago, I visited Korea for the first time since 2018. The official reason for the trip was to celebrate my partner’s 30th birthday, but we had a side request planned: To rescue the 3.1 million won that had been languishing in my Korean retirement account for years.
In US dollars, my billionaire situation is not so good. With an exchange rate of about 1,450-to-1, my returned Korean nest egg is currently worth about $2,100.
The fact that I was able to earn any money after such a long time surprised me. Getting the full amount back with some interest was the last thing I expected.
As I walked into Woori Bank on a dreary Monday morning in December, my expectations were low, but I was prepared nonetheless.
Stuffed inside my old black portfolio – the same one I used when I opened the account – was my old passport with my Korean work visa, a scan of my Korean residency card, all three of my Woori Bank account booklets, my new passport and the notes I had collected over the years trying and failing to withdraw money from the US. I was fine.
As I approached the door, I practiced the speech I was going to tell the guard at the door, repeating myself.
Hello It is using IRP hazisi masarai zezorzej. “Hello, I’m having trouble closing my IRP account.”
“Well, IRP?” he responded by pressing a few buttons on the terminal next to him. A small ticket went into the tray. “Here’s your number.”
I looked at it – the 2013 issue. ProgressI thought. I sat down and relaxed.
How did my money get stuck in Korea?
Between 2016 and 2018, I lived in Korea, teaching English at a school hagwonwhich is a private school (often called a “cram school”) that specializes in a particular subject. On the side, I tutored North Korean refugees and moonlighted as a writer. It was an amazing experience, but after a few years, I decided to move to Florida and do my journalism degree on the job (more).
That meant I had to watch my finances. After completing an annual employment contract, it is common to receive a form of severance payment, usually equivalent to one month’s salary. Basically, you get 13 months of payment for a 12 month contract.
When the cram school I worked at asked me to open a retirement account to have my severance deposit, I didn’t think much of it at first. Short for individual retirement pension, IRPs are similar to individual retirement accounts (IRAs) in the US.
At the time, I was 24 years old and had no idea how both of them worked.
So I went to Woori Bank and opened an account. I remember that the narrator was curious about this decision. He told me that the finances had to be handled personally, and it was clear that I was preparing to leave the country forever.
Shocked, I informed the school about that important idea that they did not mention.
The unnamed labor attorney replied that my severance payment would take a while, and since I had to leave South Korea within 30 days due to immigration law, they would put it into a separate account – directly linked to my US bank.
Simple enough, I guess.
My first month back in the US, I stayed at my mother-in-law’s house in someone else’s backyard as I wanted a stable dig. I was looking forward to my break in Korea, especially since most of the apartments I visited required the first and last month’s rent and a security deposit.
Ten days after I was apartment-hunted, I received a notice that the deposit had finally arrived. In my Korean retirement account.
Frustrated, I emailed the cram school’s HR department in the same thread where they assured me that my severance would be credited to my US account.
“We received your email and are looking into possible solutions. We will get back to you shortly,” someone replied.
A few days later, another email. The so-called solution? Give the HR rep a power of attorney in Korea so he can refund the money on my behalf.
Tired and delusional, I started looking into this option. I saw that the process involves going to the Korean Embassy or consulate. The closest was in Atlanta, about 500 miles away. I told HR that their repair would require me to drive 1,000 miles round trip.
I never heard from them again.
Power comes from abroad
It’s hard to say what normal situations like mine are like. Keeping track of how many Americans live abroad is difficult enough, with estimates ranging from 3.3 to 9 million, even though that doesn’t say anything about their finances. One federal law requires Americans living abroad to disclose financial accounts worth more than $10,000, but the filing figures are not routinely published on ordinary income tax returns.
According to some estimates, Americans disclose more than a million foreign bank accounts annually. But given the $10,000 limit and the blurring of the law, those numbers are likely to be lowered a bit. Also, not all financial accounts have a personal plan for my Korean retirement account.
It’s safe to say that my situation is not entirely different. But I felt alone.
The only option that made sense to me was to go back to Seoul and earn money for myself. Surely that wouldn’t take too long; I needed to settle into my new job and save for travel.
But life is complicated. A year passed, then five. Then there are seven.
It took my partner turning 30 – a milestone he never thought he’d reach as a terminal cancer survivor – and asking to celebrate in Asia for me to finally get on a plane.
Back at Woori Bank, I sat anxiously waiting for my number to be called. Returning to Korea after such a long time felt surreal. Over the years, my long-lost Korean retirement savings had become a personal memory. I even remember saying it in my job interviews with Money.
There I was, in Seoul, about to learn the fate of my severance pay. An automatic announcement rings through the intercom. Number 2013.
As I approached the IRP specialist’s desk, I could see that he was sour for a second. I was the only foreigner in the bank, and I think he knew he was going to face problems. I sat across from him, took out all my documents and gave him my spiel as best I could in broken Korean.
“I am an American. I used to live in Seoul. I have an IRP, and I want to close it.”
He nodded and started typing on his computer. Then came the forms, asking all sorts of unexpected questions. Where did I live when I was in Korea? What was the Airbnb host’s phone number? How long would I be here? Where do I live in the US now? Was I going back to Korea? Please sign here, and here, and here.
Among the many documents and digital signatures, I didn’t know if I was getting any money. I suddenly realized that it was too late to turn around. Every so often, the technician and I would pause, look up at our separate forms, take a deep breath, and continue.
This went on for about two hours. Finally, he had to take his lunch break. It was past noon, I had entered the bank at 10:20 am. He told me to come back and see him tomorrow.
Photos courtesy of Adam Hardy
Payday, seven years later
The next day, I headed to the bank with the giant canvas Uniqlo bag I had been carrying all day.
I was worried, but the IRP technician the day before saw me come in and waved me over. I sat at his desk, annoyed, and packed my bag. Back to work: Sign this form, type your email address, rinse and repeat.
Finally, he printed out the receipt, slipped it on the desk and identified the number. 3.17 million won. My eyes opened. Since my 2018 salary was 2.9 million, I expected that only in the best case scenario. I was also worried that I might incur withdrawal penalties since I was not of retirement age.
Not only did I avoid penalties, but the money was automatically deposited into an interest-bearing account equal to cash. That meant it had grown by about 9% since it was posted all those years ago.
The salesman fetched his manager, and they began to process the money in the big cash register. I listened to the whoosh of 63 bills in the 50,000 won series pile up in disbelief. He picked up the win stack from the cash tray in front of me and smiled.
I had a whole script I was rehearsing thanking him and apologizing for all the trouble. But I was very happy. All I knew was がれつつれならますます! (“Thanks for the help!”) over and over again as I bent over and stuffed handfuls of money into my wallet.
It wasn’t until I took a selfie in front of the bank that I realized how much I must have looked like a cartoon thief stuffing all those bills into a big canvas sack.
After that, I really skipped going back to Airbnb. But when I entered the house, I pretended to be serious. When my partner asked me how it was going, I sighed, and said I had to come back the next day.
Then, when he wasn’t looking, I reached into my purse and threw bills across the room. We burst out laughing.
By that time we were both starving. I said, dinner was upon me.
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