By Yoon Ja-young
Only two out of 10 Koreans consider themselves middle class; while four out of 10 think they will fall into poverty after they retire.
Korea’s Middle Class, a report released by NH Investment and Securities Wednesday, shows the country’s mid-income earners are losing confidence.
The report is based on a survey on 1,128 people in their 30s, 40s and 50s. Statistically, those who make between 50 and 150 percent of the median income are categorized as middle class. Under this definition, 65.4 percent of Koreans are categorized as such. These households make between 1.87 million won and 5.63 million won a month.
However, only 19.8 percent of those surveyed consider themselves middle class ― 79.1 percent said they were below this level.
A report by Hyundai Research Institute also noted that only 45 percent of Korea’s middle class perceives themselves as so. Research economist Lee Jun-hyup said people take into account factors other than income as well when they think of middle class. They include assets, leisure and quality of life.
“While the ratio has been increasing in Korea, the ratio of people considering themselves to be so has been decreasing since the global financial crisis,” Lee said.
He stressed there should be doors open for the middle class and the low-income households to accumulate assets so that they can enjoy life after retirement.
The average monthly income of those in the NH Investment and Securities’ survey was 3.7 million won. They had on average 230 million won in assets. They owned on average a 102.4 square meter apartment, drove a mid-size car to work, and spent 6,200 won for lunch.
They took exercise on average 1.2 times a week, had a social gathering 2.5 times a month and enjoyed cultural events 0.9 times a month. Over half of them had taken no overseas trips at all during the past three years.
Half of them were single-income households, and 59.7 percent perceived themselves as conservatives.
Four out of ten said their income would fall short of 1 million won after they retire. According to the securities company, at least 1 million won a month is needed for a senior couple to lead a middle class life.
“It is not as easy as one thinks to live as an ordinary middle class couple,” said Lee Yun-hak, a researcher at NH Investment and Securities.
He advised that there should be three layers of income sources built for life after retirement, composed of pension, job, and real estate.
“A good pension is like having a lifetime job. The best strategy for retirement, however, is not retiring at all,” Lee says.
However, the survey showed that the middle class have only on average 26.6 million won in assets set aside for life after retirement. One out of three had no assets at all, and 48.7 percent weren’t making any preparations.