South Koreans Brace for Pension Gap as Retirement Costs Outpace Savings (Image supported by ChatGPT)
SEOUL, Sept. 29 (Korea Bizwire) — South Koreans believe they will need about 3.5 million won ($2,600) a month to live comfortably in retirement, but most expect to secure only two-thirds of that amount, according to a new survey by KB Financial Group’s research institute.
The study, released Sunday, polled 3,000 people aged 25 to 74 between late May and mid-June. Respondents said they considered 2.48 million won the minimum required to cover basic housing, food and clothing, while 3.5 million won was deemed necessary to also fund leisure, travel and family support. Both figures declined slightly from last year’s survey, reflecting tighter household budgets.
In reality, however, respondents said they could expect to muster just 2.3 million won in monthly retirement income — short of even the minimum standard, and covering only 65.7 percent of the “comfortable” threshold. The gap amounts to about 1.2 million won, underlining widespread anxiety about aging in one of the world’s fastest-graying societies.
Most said they plan to rely on the national pension (88.6 percent), followed by financial investments (50.2 percent), personal pensions (47.8 percent), employment income (47.5 percent) and retirement pensions (42.2 percent). Still, the realities of working life complicate such plans.
While non-retirees said they hoped to keep working until age 65, the average retirement age among those already retired was just 56 — nearly a decade earlier. On average, Koreans said they begin preparing financially for old age at 48.
Housing also factors heavily into retirement security. About one-third said they would consider tapping a reverse mortgage, while an equal share said they would not. Another third had never considered the option. For future living arrangements, respondents prioritized access to medical facilities, followed by transportation, natural spaces such as parks, and shopping amenities.
The findings underscore the precarious balance between expectations and reality for Korea’s retirees, as falling birthrates, longer lifespans and rising costs test the nation’s pension and welfare systems.
Lina Jang (linajang@koreabizwire.com)
