A] Prelude
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B] The Issue
Kim Young-soon, an office cleaner in her early 70s, says she grapples with high costs of living as her disposable income has been decreasing in recent years. Disposable income refers to the amount of money that is left for personal expenses and savings, after taxes, insurance, interest and other payments.
“The employer would not hike my salaries, due to the high vacancy rate of office buildings amid the sluggish economic growth,” Kim said, adding she is financially distressed with high borrowing rates after taking out bank loans to lease an apartment. Living by herself away from her children after the death of her husband, Kim also said she is “financially worse off than her friends who live with spouses and rely on dual income for living.”
C] The Details
Kim illustrates the serious nature of Korea’s aggravating elderly poverty rate, especially after the country became a super-aged society in 2024 and is on course to get old older at an even much faster pace. A super-aged society is where those aged 65 or older make up a 20% or higher share of the country’s entire population.
According to data compiled by Statistics Korea and the Ministry of Health and Welfare, the relative poverty rate for older adults was measured at 38.2% in 2023. The rate is the proportion of people aged 65 or older whose disposable income is less than the median income of their peer group. The rate ticked up from 38.1% in 2022, marking an increase for the second straight year after decreasing steadily in preceding years. The rate diminished from the mid- to lower-40% range between 2013 and 2019, before dropping to 38.9% in 2020 and again to 37.6% in 2021.
The 2023 figure was higher than Korea’s overall poverty rate of 14.9% and 9.8% for the working-age population aged between 18 and 65. The poverty rate for older adults was significantly higher for women, at 43.2% compared to 31.8% for men. The finding came as there are more women than men older than 65. For instance, the number totaled 5.69 million for women and 4.54 million for men in December 2024.
Hanyang University economics professor Ha Joon-kyung warned that poverty-related issues will “increasingly haunt Korea” as it ages faster. Citing data from Statistics Korea, the professor explained that it took 20 years for older adults to account for 11% of the entire population but only another 15 years to reach 20%.
D] Projections
If the trend continues, the rate is projected to hit 25.3% in 2030 and 40.1% in 2050. “A fast-aging society may weaken Korea’s international competence on productivity unless corresponding measures are taken,” the professor said. An OECD report, titled “Pension at a Glance 2023,” showed that Korea’s elderly poverty rate is the highest among the OECD member states. Based on data from 2020, the report indicated that Korea marked 40.4%, which was nearly triple the OECD average of 14.2%.
In particular, the report noted that no OECD countries except Korea had an elderly poverty rate above 40%. The rate was higher for older people, coming to 31.4% for those aged between 66 and 75, compared to 52% for those 76 and older. Separate OECD data also showed Korea’s older population faces disproportionately high economic inequality than other age groups.
E] Income disparity
The Gini coefficient, a measurement of income disparity, was 0.376 for those aged 66 and older in the country, higher than the national average of 0.331. For OECD member states, the average Gini coefficient for older populations was 0.306, which was lower than the overall population’s 0.315. Seoul National University economics professor Lee Chul-hee said fostering a favorable working environment is crucial for older adults to “practice professionalism even after their retirement and make the sufficient income they deserve.”
F] The future
The professor noted an increasing number of older adults are forced to continue working after retirement as they have insufficient money. Yet, many of them end up with jobs that do not match their pre-retirement career or skills. A 2024 report from the Korea Development Institute showed that people, as they get older, had a higher possibility of obtaining jobs that are far from optimizing productivity.
The report took into account jobseekers’ aptitudes, talents, passion and other factors. The gap between ideal and actual jobs for these workers, according to the report, especially widened as people reached 50 or older. Concerning possible measures to help older adults land jobs that match their pre-retirement careers, Chung-Ang University economics professor Ma Kang-rae said “removing unfounded bias against senior workers should be a precondition.”
The professor said employers avoid hiring older adults because they think retirees are not as committed as young peers in terms of work mindset. A civic activist group, Workers’ Solidarity, also said job matching for older adults is a more urgent matter in rural areas. It pointed out the elderly poverty rate is 57.6% in farming and fishing villages nationwide, compared to 47% in small cities and 42.1% in metropolitan cities.