This study aims to examine the association between firm’s overinvestment and voluntarily appropriated retained earnings. Prior studies provide the theory and evidence that overinvestment can lead to an overall increase in retained earnings. With regard to overinvestment practice, however, whether the part of retained earnings is to be reserved as voluntarily appropriated retained earnings is still not fully answered, calling for further investigation. Using data of firms listed on the KOSPI market from 2014 to 2018, this study finds that overinvestment is significantly and positively associated with the level of voluntary reserves. This study also finds that overinvestment has a significant and positive association with the number of reporting items for voluntary reserves. Interestingly, the study further finds that the positive relationship between overinvestment and voluntary reserves level is significant only for non- growth related reserves. The results from additional analysis utilizing a combined measure are consistent with the main results. The findings from this study suggest that the overinvestment is an important driver that can affect firm’s management of voluntarily appropriated retained earnings.