Babyboomers forced to retire earlier
By Lee Hyo-sik
Kim Seong-ho, born in 1961, will never forget the day his boss asked him to take an early retirement package earlier this year.
The 52-year-old Korean baby boomer (those born between 1955 and 1963), who is now unemployed, used to be a production manager at a small industrial plant in Jeonju, North Jeolla Province.
Under his company’s labor guidelines, Kim was allowed to work until he turns 56, but his employer asked him to accept voluntary retirement, citing the prolonged economic downturn weighing on the plant and other financially-weak small manufacturers.
``I am perfectly healthy and able to work for 10 more years if my boss would let me,’’ Kim said. ``But unfortunately, business has turned from bad to worse for the company over the past few years. Many older workers, including myself, have been let go.’’
Kim has been looking everywhere to get a new job over the past few months, but to no avail.
``These days, it is extremely difficult for middle-aged men like me to find a job. It feels likely the only option I am left with is to open a restaurant or other self-employed businesses by spending my severance pay and life savings,’’ he said. Kim’s two children attend university.
``I need to generate stable cash flow until my kids find jobs and get married. But I still have to wait 8 more years to be eligible for a state pension. I just do not know what to do,’’ he lamented.
Like Kim, many baby boomers these days are being forced to retire early amid the continued economic slump.
According to latest research released by the Korea Labor Institute (KLI), Koreans are found to have retired much earlier than their European peers, indicating older workers here will likely face greater financial difficulty after retirement.
The state-run institute said Friday that an average salaried worker is allowed to remain on the payroll until they turn 57.4 years-old. But in reality, employees retire at 53 on average.
In contrast, European workers can stay on the job until 65 under labor-management agreements. But they retire at 61.8 on average.
``Our study shows that Korean employees stop working nearly nine years earlier than their European counterparts,’’ KLI senior fellow Keum Jae-ho said. ``On a male-to-male comparison, an average European remains employed for as many as 12 years longer than their Korean counterpart, given men here spend up to three years fulfilling mandatory military service.’’
Keum said some local workers retire early on a voluntarily basis to enjoy post-retirement life. ``But this is not the case for the majority of employees here. Even after retirement, they still need to earn money to finance children’s education and post-retirement life.
Many baby boomers will have to wait several years after retirement until they are eligible for a state pension. The National Pension Service starts paying retirees at an average of 60.
They often face a hardship in finding work and even if they do, they earn substantially less than before and work under poorer working conditions.
Others opt to open restaurants, coffee shops and other small, independent businesses to make money. But many go out of business, lose their retirement savings and fall into poverty.
``To help baby boomers prepare for post-retirement life, the country should raise the retirement ages to over 60, reflecting Koreans’ rising life span. This will also help discourage retirees from entering the over fiercely-competitive service sector,’’ the research fellow said.