Senior job seekers looking at a bulletin board containing information on job posts at a job fair held in the southeastern port city of Busan. (Yonhap)
SEOUL, Aug. 24 (Korea Bizwire) – An increasing number of South Korean seniors are opting to begin receiving national pension payments earlier than the legal standard, with the cumulative count expected to surpass 1 million individuals.
According to a report from the National Pension Research Institute, the count of senior citizens opting for early pension benefits is projected to reach 856,000 by this year’s end, 961,000 by 2024, and 1.07 million by 2025.
An estimated 6.45 trillion won (US$4.88 billion) is anticipated to be disbursed to these early pension recipients by year-end, 7.89 trillion won by 2024, and 9.3 trillion won by 2025, edging close to 10 trillion won.
In a focus group survey conducted by the institute involving 33 early senior pension recipients, a majority elected to commence pension payouts earlier to cover living expenses, driven by the belief that earlier receipt is advantageous.
For instance, consider a 65-year-old man earning 2,680,000 won (US$2,020) per month, enrolled in the national pension program for 20 years. Upon reaching the legal retirement age, he would receive a monthly pension of 540,000 won.
Opting for a one-year early pension commencement reduces the monthly pension amount to 510,000 won, or 380,000 won if the pension disbursement begins five years earlier.
Assuming a 20-year pension duration, the full sum received upon selecting the legal retirement age would be 109.8 million won.
Opting for a one-year early pension commencement would yield a total of 107.5 million won, translating to a 2.1 percent reduction.
Should the pension distribution start five years ahead, the total received would be 92.1 million won, reflecting a 16.2 percent decrease.
H. M. Kang (hmkang@koreabizwire.com)
