Programs Sought for Retiring Baby Boomers
By Kwon Mee-yoo
Staff Reporter
The Ministry of Labor is seeking to extend the retirement age of the baby boomer generation by introducing a ``salary peak'' system that cuts the wages of workers after they reach certain age in return for a longer period of employment.
"When the system is introduced, long-serving employees will be given a lesser workload and this will lead to fewer workers retiring early," a ministry official said.
The government will also expand its resources for seniors looking for jobs after they retire.
The Economic and Social Development Commission will launch a committee later this month to create jobs for those from the baby-boomer generation who are looking ahead to retirement in a few years.
The retirement of the baby-boom generation is emerging as one of the most serious social issues here.
Born in the period from 1955 to 1963, the generation accounts for some 15 percent of the nation's total population, or 7.1 million people.
Many of them have entered retirement this year and most of the 7 million are expected to leave work by 2018.
They are entitled to national pension when they turn 60, but many retire in their mid-50s, leaving them without income for several years.
Jun Kwang-hee, a professor at Chungnam National University and president of the Population Association of Korea, said most of the baby boomers in Korea are not ready for retirement. Born in 1955 _ making him a member of the baby-boom generation ― Jun considers the retirement of the generation as a "black hole" for society.
"Practically none of the baby-boomers around me, regardless of their occupation, have saved money for post-retirement life," he said. "When the generation starts retiring full-scale, Korea will have a hard time dealing with them."
According to Statistics Korea, the average net assets of those in their 40s, many of whom are baby boomers, is around 302 million won ― 226 million won in real estate and 67 million won in savings.
The Pension Research Institute of Mirae Asset surveyed 500 retirees last March and 75 percent of them said they had not made any preparations for retirement.
Korea Development Institute estimated that the country's potential growth rate is going to go down from around 4 percent in 2020 to 2.9 percent in the 2020s and 1.6 percent in the 2030s.
In the United States, baby boomers are expected to live after retirement on personal savings, social security benefits and personal pensions. As the generation started retiring in the late 1990s, the U.S. government raised the age of eligibility for Social Security, to 67 from 65 to prevent the exhaustion of the pension fund.
In Japan, some 6.8 million of the ``Dankai'' generation started to retire in 2007 and the government extended the retirement age to minimize the impact of their retirement.
In 2006 the European Union recommended that its member nations to push their retirement ages past 65 and is trying to raise the employment rate of seniors to higher than 50 percent.