Skip to content
personal-finance — Korean — Health — Health-and-wellness — Society — Central — Economy — Education — Raise — Business — Elderly — Science — Aging — Industry — Finance — Article

Five potential pitfalls in Korean retirement and strategies for bypassing them

Achieving a secure retirement isn't about taking the easy route with welfare expansions. If Korea neglects building essential structures, it may inadvertently create a society that's unsustainable in the long term.

,   and  Administrator
3 min read

Five potential pitfalls in Korean retirement and strategies for bypassing them

Rewritten Article:

Title: Elderly Workers and the Controversial Proposal of Raising the Retirement Age

Embrace the sight of a senior citizen savouring juk (Korean porridge) on the streets of Jongno District - it might become a more common occurrence.

Here's a glimpse of the senior workforce in action. [JOONGANG ILBO]

As the Workforce Ages, Pension Ages Come Under Scrutiny

Labor Reform and the Desired Hike in Retirement Age (KOR)

South Korea's Young Workers React Negatively to Proposed Raise in Retirement Age

A retiree peruses job listings at the Senior Job Fair in Mapo District last year. [YONHAP]

This article is an edited translation courtesy of our website staff, with the help of generative AI technology.

South Korea's young workers express a mix of reservations and negative sentiments towards the idea of increasing the retirement age, primarily due to concerns over employment competition and future job opportunities.

Why are younger workers uneasy about bumping up the retirement age beyond 60?

  • The current retirement age is set at 60, but potential changes like those proposed by candidates such as Lee Jae-myung envision the retirement age climbing to match the pension age for the younger generations, which steadily rises to 65 [2][3].
  • While extending the retirement age could alleviate issues stemming from an aging population and longer life expectancy on a broader scale, there are considerable worries about its impact on the employment prospects of younger workers.
  • A Bank of Korea report reveals that after South Korea increased the legal retirement age to 60 in 2016, employment among older workers rose in the 55-59 age range, but employment dropped by 6.9% among workers in the 23-27 age bracket during that same period [5]. This finding suggests that longer-tenured older workers might consume job opportunities intended for younger workers, exacerbating competition.
  • The report suggests companies responded to increased labor costs due to extended retirements by cutting new hires and fixing the issue with early retirements or other workforce adjustments, adding fuel to younger workers' concerns about future employment.
  • In essence, younger South Korean workers might view extending the retirement age as a risk to their job security and career development, fearing a freeze in labor market mobility and heightened competition from elder colleagues.

To summarize, younger workers in South Korea tend to feel apprehensive about increasing the retirement age because it may restrict their employment opportunities and worsen their job outlook, even though the policy aims to tackle broader demographic and economic challenges [2][5].

  1. The rising debate over increasing the retirement age in South Korea has escalated, with a notable opposition coming from the younger workforce who fear its potential impact on their job prospects.
  2. Concerns over increased competition for job opportunities and future employment stability are among the primary reasons why South Korea's young workers hold a negative view towards proposals to raise the retirement age.
  3. The retirement age in South Korea is currently set at 60, but proposals like those suggested by candidates such as Lee Jae-myung aim to raise it to match the pension age for upcoming generations, which gradually increases to 65.
  4. Extension of the retirement age could address broader societal issues such as an aging population and increasing life expectancy, but it may also have negative consequences on employment rates among younger workers.
  5. According to a Bank of Korea report, when South Korea increased the legal retirement age to 60 in 2016, employment among older workers in the 55-59 age range increased, while employment for workers in the 23-27 age bracket dropped by 6.9% during the same period.
  6. This finding suggests that prolonged employment of older workers could lead to the consumption of job opportunities intended for younger workers, thereby intensifying competition in the job market.
  7. Companies, in response to increased labor costs due to extended retirements, have allegedly reduced new hires, adopted early retirements, or adjusted their workforce to address the issue, fueling concerns among younger workers about future employment.
  8. Ultimately, South Korean young workers may perceive extending the retirement age as a threat to their job security and career advancement, fearing reduced labor market mobility and intensified competition from their elderly counterparts.
A secure retirement cannot be rushed. If Korea chooses the less demanding route of widening welfare without establishing solid structures, it may face the consequences of becoming an unsustainable society over time.
Shortcut-free retirement security is a must. Pursuing an easier route of welfare expansion without establishing robust structural foundations in Korea may lead to an unsustainable society over time.
Avoiding a financially secure retirement requires effort and proper planning. Should Korea choose the seemingly effortless route of broadening welfare without addressing underlying issues, it may face the consequence of becoming an unsustainable society over time.

Read also:

    Related

    Latest