SEJONG, Sept. 6 (Korea Bizwire) – With Korea’s low fertility rate of 1.24 (2015) and more of its working population retiring, an aging society is now at hand.
The trend was reflected in a recent report by the National Tax Service and the Korea Institute of Public Finance, which noted the dramatic increase in the amount of pension income tax being collected, an increase of almost 25 times over the past five years.
According to the report, last year’s tax from pension income was 36.8 billion won ($33.3 million), an increase of 102.5 percent from 2014 (18.2 billion won). The tax revenue accounted for only 1.48 billion won in 2010.
Authorities point to the changing population structure that has led to an increasing number of pensioners in Korea as a result of the phenomenon. More specifically, it’s the baby boomers, born between 1954 and 1964, who have finally reached their age of retirement.
The baby boomer generation accounts for roughly 14 percent of Korea’s entire population. Those born in 1955 have turned, or will turn 61 this year, which considering the average retirement age of 57, means that by the end of the year, the majority will have already left their main careers.
The generation that once contributed to Korea’s never-before-seen development and growth is quickly stepping out of its social duties.
“With the acceleration of population aging, we expect the number of pensioners opting for retirement to continue to rise along with related tax revenue,” said an NTS official.
In 2015, those aged 65 years and older accounted for 13.1 percent (6.62 million) of all Koreans. The figure is expected to rise to 40 percent by the year 2060.
By Lina Jang (firstname.lastname@example.org)