Korea is entering an ultra-aging society next year with the population aged 65 and over surpassing 20%. By 2050, this figure is expected to reach 40%. According to Statistics Korea, by 2052, one out of every five households is projected to have a head of household aged 80 or older. In July, the number of elderly people aged 65 and above in the population exceeded 10 million for the first time.
The rapidly aging population is increasing the life expectancy of Koreans, but adequate preparations are lacking. Although reforms to delay the depletion of the National Pension, a key pillar of retirement life, are being pursued, progress is hindered by political wrangling.
According to a report by the SK Institute for Social Values (CSES) on “Social Issues as Viewed by Koreans in 2024,” one in four Koreans (24.5%) responded negatively to the idea of enjoying an appropriate standard of living after turning 65. Confidence in retirement life was highest among those in their 20s at 46.6%, lowest among those in their 40s at 27.4%, and surprisingly higher among those aged 60 and above at 37.5% compared to those in their 40s and 50s.
Jung Yoo-jin, co-CEO of TripleLight, stated, “The dual caregiving burden of preparing for one’s own retirement and caring for children and parents seems to have influenced this situation.”
Perceptions of the societal issues brought about by aging vary by age group. Those in their 20s and 30s expressed significant concerns about pension depletion, while those aged 40 and above were more worried about the decrease in the working-age population and the decline in economic growth.
According to the Ministry of Health and Welfare, if the current contribution rate (money paid in) of 9% and replacement rate (money received) of 40% are maintained, the National Pension will be depleted by 2056. This is why the government recently introduced a reform proposal to increase the contribution rate to 13% and the replacement rate to 42%. The government’s position is that by introducing an automatic stabilization mechanism to adjust pension benefits based on fiscal and demographic conditions, it can delay the depletion of the pension fund until 2088.
Chung Soon-dool, President of the Korean Gerontological Society and Professor of Social Welfare at Ewha Womans University, emphasized the urgency of successful pension reform to address elderly poverty. He stressed that Korea, due to being late compared to advanced countries in adjusting insurance premium rates to determine the success or failure of reforms, needs to accelerate its efforts.
Ultra-aging and ultra-low birth rates lead to a decrease in the working-age population and a decline in economic growth. Those aged 40 and above, who are responsible for the backbone of the Korean economy, are most concerned about this issue. According to the Korea Employment Information Service, the working-age population aged 15 to 64 is expected to decrease by 1,703,000 people from 2022 to 2032.
While there are calls for the introduction of foreign labor to prevent job vacancies and a decrease in growth, public perception remains predominantly skeptical. In a recent survey, 51.6% of respondents expressed discomfort with the idea of foreign immigrants becoming their supervisors at work, and 62.6% cited “ethnic, religious, and cultural conflicts” as the most worrisome issue if the number of foreign immigrants were to increase.
[Reporter Moon Ji-woong / Reporter Lee Jin-han]
In 2030, will 25% of the population not receive pensions due to inadequate retirement planning?
