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Bankruptcy claims grow for Koreans in their 60s as retirement funds run dry, debts rise

Published: 28 Jan. 2026, 07:00

Older citizens wait in line for the free meal near the Tapgol Park in central Seoul on Jan. 20. [NEWS1]

When a 67-year-old man from Gyeonggi lost his part-time job at a convenience store last November, he also lost his last lifeline. Unable to cover basic living expenses on his 1.6 million won ($1,100) monthly salary, he had gradually taken out loans — until the debt ballooned to 50 million won in principal alone. With no job prospects and mounting interest, he had no choice but to file for personal bankruptcy.

He is one of a growing number of older Koreans turning to bankruptcy as a last resort. In fact, almost half, or 46 percent, of all personal bankruptcy applicants last year were aged 60 or older, according to the National Court Administration. This was the highest proportion ever recorded.

The trend has worsened every year since 2020, when the proportion stood at 31 percent. Last year, 13,231 people in their 60s filed for bankruptcy, the highest of any age group. For the first time, those aged 70 and older surpassed 5,000.

As bankruptcies climb, so does the number of repeat filers among older adults. In 2023, 56.2 percent of those filing for a second bankruptcy were aged 60 or older — up from 43.1 percent five years earlier. The list even included one person over the age of 90.

Experts warn that the surge in what are being labeled as “elder bankruptcies” reflects deeper structural issues. Many older adults, pushed out of stable jobs, turn to self-employment using their retirement funds, only to see their businesses fail — ending up in insurmountable debt.

“People are living longer but can’t generate new income after leaving their primary careers,” said Kim Young-ryong, a bankruptcy lawyer with over 20 years of experience. “Instead, they’re left with debt from failed businesses.”

An older citizen collects paper boxes to sell to a recyling store in Jongno District, central Seoul, on Dec. 28, 2023. [YONHAP]

The Bank of Korea echoed those concerns in its latest financial stability report, warning that loans to self-employed older adults are becoming increasingly risky. Debt held by borrowers aged 60 and older jumped 113.9 percent between the end of 2019 and the third quarter of 2023, reaching 389.6 trillion won. Delinquency rates are expected to climb.

Korea became a “super-aged society” last year, with 20.3 percent of the population aged 65 and over. Despite being the country where older adults work the most among OECD members, their labor is driven by necessity. According to a report by the National Pension Research Institute, 54.4 percent of older workers said they keep working to cover living expenses — far outweighing motivations like “the joy of working” or “avoiding boredom.”

Experts say short-term fixes like raising the basic pension won’t be enough.

“In most advanced countries, baby boomers are wealthier than their children thanks to accumulated assets,” said Woo Seok-jin, a professor of economics at Myongji University. “But in Korea, most older adults are stuck supporting both aging parents and adult children, and over 80 percent of their assets are tied up in real estate they can’t easily liquidate.”

To prevent more older adults from falling into financial ruin, Woo called for policies that promote asset diversification and improve liquidity options beyond reverse mortgages.

“Without structural change, we’re only delaying the crisis.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM KYUNG-HEE [[email protected]]