Senior citizens’ poverty woes

Senior citizens’ poverty woes

Senior citizens, who spearheaded the country’s economic miracle from the ashes of the 1950-53 Korean War, are now struggling with financial hardships in their later years. With the approaching retirement en masse of the country’s baby boomers ― those born between 1955 and 1963, the poverty problem of the elderly has the potential to mire the nation without proper precautions. A report released last week by the National Pension Research Institute shows that senior citizens here run the highest risk of falling into poverty after retirement, compared to those in other Organization for Economic Cooperation and Development (OECD) member countries. The institute is affiliated with the National Pension Service (NPS). According to the report, the income of elderly people stayed at 66.7 percent of the average household income in Korea last year, ranking second lowest in the economic club of rich countries. The ratio placed Korea at 29th among the 30 OECD members surveyed and the only nation with a lower figure than Korea was Ireland at 65.9 percent. Mexico was at the top of the list with 97.1 percent, followed by Austria (96.6 percent), Luxembourg (96 percent) and Poland (94.7 percent). Japan, one of the world’s fast-aging countries, posted a significantly higher rate than Korea at 86.6 percent. The lower income level of Korea’s senior citizens was attributed largely to the inadequate public pension system that usually acts as a social safety net for the elderly after retirement. Specifically, only 15.2 percent of their income came from the public pension scheme. In contrast, earned income through labor accounted for 58.4 percent of total earnings of an average person aged 65 or over. What’s worse is that only one third of the elderly receive the state pension and the average amount is as little as 280,000 won per month. The poverty rate measuring the ratio of households with income at less than 50 percent of the median income among the elderly reached 45.1 percent in the mid-2000s, the highest level in the OECD. The result is that senior citizens continue to work after the retirement age and often have to take jobs that are less rewarding. As it has been identified as an issue for many years now, it’s time for the government to come up with proactive measures to address the poverty problem of the elderly. To better prepare for the future of the nation, among other things, it is urgent to transform the labor market structure that is currently suited for a life expectancy of 60 to 70 to the centenarian age.