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Four in 10 S. Korean households unprepared for old age: report

All News 09:30 January 21, 2016

SEJONG, Jan. 21 (Yonhap) -- Approximately four in 10 South Korean households have no concrete plans to cope with life after retirement, a report showed Thursday.

The report by the Korea Institute for Health and Social Affairs (KIHASA) on circumstances facing senior citizens showed 38.5 percent of local households are unprepared for old age, while those who claim they are ready expect difficulties in maintaining current living standards.

"Many South Koreans don't have plans for life after retirement because they have to educate their children and get them settled in society, resulting in almost no money being saved for old age," the think tank said.

"Many senior citizens are compelled to find jobs to make ends meet, or opt to open small businesses that may fail."

According to the findings, those with regular jobs or self-employment are better prepared overall.

Among full-time regular workers, only 8.6 percent said they don't have a retirement plan, with 91.4 percent saying they did have some sort of backup.

Among the self-employed, 73.1 percent said they have some sort of system in place, while 26.9 percent said they are without a contingency plan.

Some 56 percent of people holding temporary or irregular jobs said they are not ready for old age. As a rule, temporary workers are paid less so they naturally are less likely to have money saved up vis-a-vis their full-time counterparts.

Even for those who claim to have an after-retirement plan, most are totally reliant on a public pension.

Nearly 78 percent of full-time workers said their retirement plan consists mainly of money they can get from the state pension program. Most added they are not pouring money into private pensions or investing in stocks, bonds or real estate to augment their incomes later on.

This, the institute said, can pose problems, since the income replacement rate of public funds is actually falling as the government moves to give back less.

"If people rely solely on pensions they may find themselves in difficult circumstances," the report stated. "Under such circumstances, a concerted effort needs to be made to help retirees find work, and to get people better trained to find employment after they leave their current jobs."

yonngong@yna.co.kr
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