ISA vs Pension Savings Comparison Calculator

ISA (Individual Savings Account) is a versatile tax-advantaged account that can hold deposits, funds, ETFs, and more. After 3+ years, gains up to 2 million KRW (4 million for low-income) are tax-free, with excess taxed at just 9.9%. Pension savings is a long-term retirement account offering upfront tax deductions on contributions, with withdrawals available as pension after age 55. ISA's strength is liquidity; pension savings' strength is the immediate tax deduction.

Pension savings offers 13.2-16.5% tax deduction on up to 9 million KRW (including IRP) in annual contributions. Those earning 55 million KRW or less get the higher 16.5% rate (max 1.485M KRW back), while higher earners get 13.2% (max 1.188M KRW). ISA has no contribution tax benefit, but offers tax-free and reduced-rate taxation on investment gains. Annual ISA contribution limit is 20 million KRW, with the 9.9% rate being significantly lower than the standard 15.4%.

After ISA maturity (3 years), you can transfer the balance to pension savings within 60 days and receive an additional tax deduction of 10% of the transferred amount (up to 3 million KRW). This is separate from the regular pension savings deduction limit (9 million KRW). This 'relay tax-saving strategy' — ISA for 3 years then transfer to pension — lets you capture benefits from both accounts.

If earning under 55 million KRW, prioritize pension savings for the higher 16.5% deduction rate. If you've already maxed pension savings, open an ISA for additional tax savings. If you need funds within 3-5 years (e.g., home purchase), ISA offers better liquidity. The ideal strategy is to maximize both: 9 million KRW in pension savings plus 20 million KRW in ISA, then transfer ISA funds to pension savings at maturity.