Retirement in South Korea is Not All That Easy

by Kathy Jones on  October 26, 2014 at 11:52 PM Lifestyle News   - G J E 4
South Korean retirees are struggling to force their way back into an unwelcoming job market as they aim to supplement meagre or non-existent pensions.
 Retirement in South Korea is Not All That Easy
Retirement in South Korea is Not All That Easy

But President Park Geun-Hye's vision of a new "creative economy" seems to have little space for a generation that grew up with shipyards and steel mills rather than smartphones and start-ups.

Kim Min-Su, 69, receives a monthly pension of 590,000 ($562)-- the sole source of income for him and his wife who live in a mini-apartment in Seoul.

"I wasn't able to put much aside when I was working because nearly all of it went on raising and schooling my four kids," Kim said after a morning spent scanning job vacancy notices at a Career Transition Centre for the elderly.

Kim, who used to earn more than 4.0 million won a month as a head engineer at a manufacturing plant in Incheon, estimates he needs a minimum 2.0 million won a month for living expenses.

Recently, he was introduced to a small company which offered to take him on full-time for 1.2 million won.

"They basically said: 'You're old. Take it or leave it'," he said.

Kim is better off than many, in that he has a little pension and help from his children.

South Korea only introduced a national pension system in 1988 and only around one-third of people aged 65 or older actually receive one.

Many more joined the pension scheme at the tail end of their careers and receive very small sums.

Close to 50 percent of Koreans over the age of 65 now live in "relative poverty" -- meaning their monthly income is less than 50 percent that of the average household income, according to the state data agency, Statistics Korea.

President Park Geun-Hye had promised to give every senior citizen over 65 a 200,000 won monthly stipend, but reneged on the commitment last year saying the economic situation would not allow it.

- 'Retired' in early 50s -

Retirement can come early in South Korea, with many companies pushing staff out in their early- or mid-50s.

Most of those have no option but to look for work elsewhere, and the average effective age at which South Korean men actually leave the workforce is 71.1 years -- the second highest in the OECD behind Mexico.

One 71-year-old at the Career Transition Centre in Seoul was still looking for work.

"It used to be quite easy for elderly people to get simple jobs, working as gatekeepers or watchmen," said Kim Yong-Sik.

"These days, however, they won't even look at you if you're over 65."

Like a large number of retirees, Kim tried to go into business for himself, using his severance lump sum of 130 million won in 1998 to open a home appliance store with his nephew.

The venture folded three years later and since then he's got by as a low paid odd-job man.

He and his wife now earn 200,000 won a month, supplemented by a 300,000 won handout from their children.

"It's not nearly enough, but we're lucky in that we're both healthy and don't have any real medical costs," he said.

The government does provide new skills training but Kim said the courses weren't really age appropriate.

"I was given a six-month course on computer web design, which was a total waste of time, as nobody is going to hire somebody my age for that kind of work," he said.

South Korea made the leap from war-ravaged backwater to Asia's fourth largest economy in just a few decades -- an unusually compressed rate of development that many struggled to keep pace with.

"A lot of people were left behind by the rapid technological development, especially in information technology," said Lee In-Su who heads the Korean Society of Welfare for the Aged.

Even those forced into retirement in their early 50s find it hard to get a second career going, and many choose to try it alone, sinking their savings and separation packages into a small grocery store or restaurant.

According to Statistics Korea, half of all self-employed, small business owners are now over the age of 50.

- A game of chicken -

A favoured option is to open a fast-food outlet specialising in fried chicken which is the country's most popular take-away, home-delivery snack.

So favoured in fact that there are now more than 43,000 fried chicken outlets across South Korea and the intense competition means that more than half the new arrivals go out of business with three years.

"About 900,000 retirees flood into the self-employment sector every year, causing cut-throat competition," Finance Minister Choi Kyung-Hwan said in September.

"The struggling owners of these businesses are one of the biggest structural problems in our economy," Choi said, noting that many are left destitute when the business collapses.

In an effort to keep more people working for longer, legislation was passed in April that would ensure no worker -- effective 2016 -- would be obliged to retire before 60.

And in May, the government, employers confederation and unions signed a pact, encouraging firms to adopt a wage-peak system, that would allow workers to stay on longer but at a steadily reducing salary.

Source: AFP

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