Retirement coming later than ever

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Retirement coming later than ever

A presidential committee investigating Korea’s demographics announced on Monday that it would begin negotiations to gradually extend the retirement age to 65, after starting the process of raising the minimum age for receiving a national pension.

Starting next year, companies with more than 300 employees must extend their workers’ retirement age to 60. Smaller companies must make similar arrangements starting 2017.

The minimum age to receive payouts is currently 60 and will be raised to 61 next year. It will then increase by one year every five years to reach 65 by 2033.

If the country’s retirement age remains unchanged by then, it will take five years for a retired Korean citizen to receive his or her pension.

In a Monday public hearing led by the Presidential Committee on Aging Society and Population Policy, Yeom Min-seob, who heads the Division of Population Policy under the Ministry of Health and Welfare, referred to the situations in the United States, Japan and the United Kingdom while stressing that Korea must eliminate or shorten the gap.

In most Korean private-sector companies, the retirement age is 53 to 54 on average. But retirees remain in the market to find new jobs, working until a little over 71.

In response to Korea’s aging society, the committee also said it would negotiate extending the demarcation of a senior citizen from 65 to 70, saying that related talks will begin next year with various sectors of society to form a consensus.

Seventy percent of the country’s senior citizens receive basic pensions, with monthly payments ranging between 100,000 won and 200,000 won ($89 to $178).

The government also has a basic subsidy program for elderly people, provided to senior citizens who do not have children; only 6 percent of people aged 65 and older receive it.

Although pushing up the minimum age at which people can start receiving those benefits would lower the government’s expenditure on senior citizens, the presidential committee refrained on Monday from stating exactly how much it would save.

According to Statistics Korea, the country’s population aged 65 and older is expected to account for more than 37 percent of the population by 2050, compared to 13 percent in 2014.

Korea is currently categorized as an aging society, meaning that more than 7 percent of the country’s total population is aged 65 years or older. The country is set to become an aged society by 2026, in which more than 14 percent of the entire population will be 65 or older.

The committee also tackled the country’s low birthrate, explaining in detail how it would raise Korea’s average fertility rate of 1.21 per woman last year to the 1.5 mark by 2020.

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