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Korea's State Pension Age Needs To Be Raised To 67: Report

By February 23, 2017 at 2:14 am
South Korea's life expectancy is one of the highest in the world at 82, and many retirees are out of money and are struggling to return into the job market. (Photo : Korea Portal)

South Korea's state pension age needs to be increased if the government hopes to avoid further deterioration of its pension fund by the country's rapidly aging population, according to a report released Thursday.

The existing law entitles state pension fund subscribers in South Korea to receive payments when turning 61 years old, but a reform law increases the state pension age to 65 in 2033.

National Pension Research Institute senior researcher Lee Yong-ha said in their policy report that the government should consider raising the stage pension age again by two more years to 67.

The proposal comes as South Korea's rapidly aging population has prompted worries over the sustainability of the state pension system.

The country's population is aging faster than other developed nations. A recent survey also showed that over half of the 7.1 million baby boomers in the country are not financially prepared for retirement.

The baby boomer generation, those born from 1955 through 1964, takes pride in being the unsung heroes of the country's miraculous economic rise between the 1960s and 1980s. They have dedicated their lives to hard work, but usually at the cost of their personal lives.

A survey of around 3,000 Koreans showed that they had put aside of just around US$1,000 each month after retirement, when in fact, the amount they needed is double that amount, according to a report by Channel News Asia last month.

In 1988, the government created the state pension system to provide guaranteed income for the elderly after their working years and to offer coverage for surviving family members and the disabled.

But as the country's life expectancy being one of the highest in the world at 82, many retirees are out of money and are struggling to return to the labor market.

As of February 2016, the state pension operator National Pension Service (NPS) said the number of their state pension program holder stood at 21.56 million.  

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