Bracing for boomers’ poverty

Korean baby boomers, those born between 1955 and 1963, are starting to retire. And with that major life change comes some major decisions and new responsibilities. Many have gradually begun to retire in their mid 50s and so have had to muddle through until they are entitled to state pension benefits, looking for other pursuits to ensure financial security. But their actions can have unintended consequences.

The boomers use their retirement money to start up businesses, pushing up business rent. The self-employed business sector gets even more crowded, and the heavy competition eventually leads many to go bust. The challenges are so significant that many are saying that starting a business after retirement means a painful end to life as a senior citizen. According to may studies, two-thirds of the boomers have no concrete post-retirement plans. They do not have much in savings or assets, having spent their earnings on educating their children or on contemporary comforts. So even if they do not open their own businesses, seniors must find ways to sustain themselves.

One job listing for a senior cashier position drew more than 70 overqualified applicants with master’s or doctoral degrees. Of 536,000 newly hired last month, 376,000, or 70 percent, were aged above 50. But they were mostly hired in low-quality jobs such as temporary ones during the New Year’s holiday, for instance.

Other countries are struggling with the same issues. The United States and Japan, whose boomers have retired before ours, are battling with the fallout from an aging society. The U.S. government recommended reverse mortgage loans, but boomers - having lost much of the value in their homes after the housing bubble burst - don’t have that option. And senior poverty has already emerged as a major social problem in Japan, where the government decided to start paying out pensions starting at age 65 instead of 60.

Experts say that as boomers live longer, they need more money to get through the twilight years. But raising the retirement age does not bode well for companies or individuals in Korea. The government should instead come up with new jobs fit for the elderly generation. The elderly also should be introduced to new and safer investments so that they do not have to lose money from recklessly opening up businesses. Society as a whole must prepare more - structurally and logistically - for an aging society.