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| A retired couple supporting each other as they live in the countryside. |
Introduction: Life After Retirement, a Question That Awaits Us All
Every person is born, grows, works, and eventually reaches the time of retirement. Life after retirement is shaped largely by one’s accumulated assets, social systems, personal health, and lifestyle habits. Korea is one of the fastest-aging societies in the world, and the way its retirees live and cope with economic reality has become a matter of great interest even for people in other countries.
Dear readers, hello! Today I would like to address a somewhat weighty subject — life after retirement. Koreans are known for working harder than almost anyone else prior to retirement, but what is life really like for them afterward? Let us begin.
In this article, we will look at how Korean retirees prepare for retirement and how they actually live day to day. My intention is not to paint an overly glamorous picture, nor to offer a pessimistic depiction, but rather to show their reality as it is. At the end, I would also like to ask our readers living abroad: “How does your country prepare for life after retirement?”
1.Korea’s Aging Society: The Speed of Change
The Progress of Aging
Korea has already entered the stage of a super-aged society. According to Statistics Korea, by 2025 more than 20% of the population will be aged 65 or older. The same generation that once fueled Korea’s rapid industrialization and economic growth is now living out its retirement years.
The Paradox of the “Miracle on the Han River” Generation
Today’s elderly, now in their 70s to 90s, are a generation that endured Japanese colonial rule, the Korean War, industrialization, and democratization. In their youth, opportunities for education and asset building were limited, yet they sacrificed much to support their families and contribute to national growth. Unfortunately, the retirement years that followed are often far from abundant.
2.The Biggest Concern of Korean Retirees: Elderly Poverty
Absolute and Relative Poverty
The poverty rate among the elderly in Korea is among the highest in the OECD.
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Absolute poverty rate: About 9.3% of the total Korean population lives below the minimum cost of living, but among the elderly, this figure rises sharply to 32.6%.
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Relative poverty rate: According to OECD standards, in 2022 the relative poverty rate among Korean seniors was 43.4%.
This means that nearly one out of every two elderly people in Korea spends their later years in economic hardship.
The Link Between Poverty and Suicide Rates
Korea also has one of the highest elderly suicide rates in the world. Poverty does not only cause material difficulties but also directly affects life satisfaction and health. Economic hardship often leads to social isolation and depression, creating a vicious cycle that contributes to rising suicide rates.
3.The Economic Reality of Life After Retirement
The Timing of Retirement and the “Income Cliff”
The official retirement age at Korean companies is 60. In practice, however, many workers leave their jobs earlier through voluntary retirement or dismissal, usually between the ages of 51 and 58. Yet, the national pension is not available until age 65. This 7–10 year gap is commonly referred to as the “income cliff,” a period of great anxiety for many retirees.
Main Sources of Income for Retirees
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Earned or business income: 48.3%
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Pensions and severance pay: 35.1%
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Property income: 10.5%
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Withdrawals from savings: 6.2%
In other words, nearly half of Korean retirees continue to work to cover their living expenses.
4.Post-Retirement Choices: Small Businesses and Re-employment
Why Fried Chicken Shops and Cafés?
The stereotype of Korean retirees opening fried chicken restaurants or small cafés has become a social satire. The reason is simple: severance pay typically only allows for modest start-up options. Large-scale businesses require too much capital, while retirees without technical expertise or professional networks often find their choices limited to small eateries, convenience stores, or coffee shops.
But the High Risk of Failure
The problem is that competition in self-employment is fierce, and failure rates are high. Many retirees who start small businesses lose their investment within a few years and end up facing even greater financial insecurity. This is why the saying “starting a business with your severance pay is a sure way to fail” is common in Korean society.
5.Changes in Retirees’ Standard of Living
The Paradox of Rising Expenses
Although income decreases after retirement, expenses often increase. With more free time, retirees tend to spend more on travel or hobbies, and the shift from workplace insurance to regional insurance raises health insurance premiums, adding to the burden.
Decline in Financial Credibility
The moment one leaves a job, it often becomes difficult to get a new credit card issued or to extend a loan. Financial institutions value stable wage income more highly than existing assets, and retirees frequently experience the sting of this shift.
6.National Pension and the Issue of Old-Age Income Security
The Limits of the “Pocket Money Pension”
Korea’s national pension has an income replacement rate of 42.5%, but this assumes uninterrupted contributions for more than 40 years. The average contribution period, however, is only 18.7 years, resulting in an actual replacement rate closer to 22%. Many retirees therefore refer to the national pension as “pocket money” rather than real living expenses.
The Need for Pension Reform
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Increasing contribution rates (from the current 9% to something closer to the OECD average of 18%)
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Adjusting the pensionable age (in connection with raising the official retirement age)
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Expanding the basic pension (with discussions on providing a universal form of basic income for seniors)
7.Asset Structure and Investment Reality of Korean Retirees
Assets Concentrated in Real Estate
Most assets of Korean retirees are tied up in real estate, which is not easily liquidated and is highly subject to market fluctuations.
Differences in Investment Culture
In the United States, the idea of “pension millionaires” reflects how individuals actively use capital markets to prepare for retirement. In contrast, Korea still has a weaker investment culture, with assets heavily skewed toward real estate rather than diversified into stocks or funds.
8.Suggestions for Life After Retirement
At the Individual Level
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Develop the habit of lowering living expenses before retirement.
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Avoid risky ventures with severance pay; instead, pursue stable investments and diversified asset management.
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Health management and maintaining social connections are also crucial preparations.
At the Societal Level
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Structural reform of the national pension system can no longer be delayed.
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Expanded job opportunities for seniors and tailored welfare policies are necessary.
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A stronger safety net is needed to guarantee a minimum standard of living for all retirees.
Conclusion: What We Can Learn from the Reality of Korean Retirees
The lives of Korean retirees are not glamorous. Many face declining living standards, unstable income, and the threat of poverty. Yet, at the same time, many strive to find new jobs, share assets, and live modestly with contentment.
Life after retirement is not only a personal issue but also a societal one. Korea’s experience may serve as a mirror for other nations facing rapid aging.
Now, I would like to turn to you, dear readers:
How does your country prepare for life after retirement? What systems are in place to ensure that retirees can live with stability and dignity?
✦ This article is not intended to boast of any system or expose shortcomings, but rather to present the reality of Korean retirees as it is, and to invite readers to reflect on and compare it with the situation in their own countries.
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