The current cost of living in old age for national pensioners was estimated at 2.01 million won (US$1,760) per month. (image: Korea Bizwire)
SEOUL, Apr. 23 (Korea Bizwire) — The Hana Institute of Finance, a research unit of Hana Financial Group Inc., has suggested in its “Report on the Retirement Life of South Korean National Pensioners” published on Monday that nearly half of the recipients of the national pension plan see a 50 percent drop in their purchasing power after retirement.
According to the institute’s survey of 650 recipients of the national pension between 65 and 74 years old, 48.6 percent said their current standard of living had dropped to below 50 percent of what they were used to during their working life.
Some 15.8 percent said they currently spend less than 30 percent of their time on actively earning money. Only 0.6 percent maintained a consumption level similar to when they were actively employed.
The current cost of living in old age for national pensioners was estimated at 2.01 million won (US$1,760) per month.
The figure exceeded 1.83 million won, the minimum cost of living in old age reported by Statistics Korea, but was about 600,000 won short of the appropriate cost of living, including the cost of leisure.
During the period when seniors actively participated in the labor market, 81.3 percent of retirees who recognized themselves as upper class recognized that they moved to the middle class after retirement.
Some 6.3 percent thought they became low-income people after retirement, and 25.9 percent of those who thought they were middle-class during their earlier times felt they moved to lower-income status after retirement.
Some 12.8 percent of pension recipients said they started preparing for retirement in their 20s and 30s, compared to 41.7 percent in their 40s.
However, most admitted that they had not prepared adequately for old age. Furthermore, participants in the survey expected their financial assets to be exhausted at an average age of 82.
Among the survey respondents, 52.6 percent said there was no way to raise additional funds after they exhausted their financial assets, while 33.8 percent said they expected to be supported by their children, indicating a lack of active retirement measures.
The government should raise the participation rate of recipients of the national pension program from the current 42.3 percent to the maximum to help solve the economic power problem while giving seniors a feeling of emotional fulfillment through self-realization.
D. M. Park (dmpark@koreabizwire.com)
