More than 1 million South Koreans in their early 60s receive no pension and hold no job traceable through administrative records, according to government data. One in four people aged 60 to 64 has failed to fill the income gap between retirement and pension eligibility with work.
According to the "2024 Pension Statistics" released on the 25th by Statistics Korea, 9.122 million of the country's 10 million people aged 65 and older received at least one of 11 types of pension, including the basic pension, the National Pension and occupational pensions. The coverage rate rose 0.3 percentage points from a year earlier to 91.2%, the highest since the data series began in 2016. The number of recipients grew by 486,000 over the year, while the average monthly payment rose 6.0% to 737,000 won.
Although more people received pensions, the amounts remained tight. The median payment, the midpoint when payments are ranked in order, was 497,000 won a month. The largest share, 46.7%, received between 250,000 and 500,000 won a month, while 3.6% received less than 250,000 won. Together, 50.3% of recipients received less than 500,000 won a month. Those receiving 500,000 to 1 million won made up 33.8%, and those receiving 1 million to 2 million won made up 9.5%. Looking at the National Pension alone, the average payment stood at just 491,000 won.
The shortfall becomes clearer when compared with the cost of living. In the National Pension Research Institute's 2024 panel survey on retirement security, older adults aged 50 and over cited a minimum retirement cost of living of 1.392 million won a month per person. The average pension actually received by those aged 65 and older amounted to only about 53% of that figure.
Narrowing the age range to the early 60s widens the coverage gap considerably. Of the 4.105 million people aged 60 to 64, only 1.824 million received at least one type of pension, a coverage rate of just 44.4%. That is less than half the 90.2% rate for those aged 65 to 69. The remaining 2.281 million received nothing from either public or private pensions.
Jobs did not fill the gap left by pensions either. Among those receiving no pension, 1.199 million held a job traceable through administrative records. The remaining 1.082 million had neither a pension nor a registered job, accounting for 26.4% of all people aged 60 to 64, or one in four. Because registered jobs are counted based on social insurance and national tax data, the figures do not capture all unregistered employment. Even so, this means a substantial number of people in their early 60s are vulnerable on both fronts, lacking both a pension and stable earned income.
The gap between retirement and pension eligibility is set to widen further. The age at which National Pension payments begin rose to 63 in 2023, and will reach 64 in 2028 and 65 in 2033. Those born after 1969 who retire at 60 will have to hold out for up to five years until they begin receiving full payments.
Re-employment has not proved a sufficient safety net either. According to a report by the Korea Labor Institute on older workers and the income gap, 24.7% of older regular employees who reached retirement age saw their earned income cut off entirely after leaving their jobs, while 20.8% saw it decline. The share who kept working until they began receiving a pension was 68.8% when the income gap lasted one year, but fell to 44.6% when the gap stretched to three years. Lee Seung-ho, a research fellow at the Korea Labor Institute, said the income gap poses a real risk of leading to a loss or reduction of earned income.
The government included in its pension reform plan a proposal to raise the mandatory National Pension enrollment ceiling from the current age of 59 to 64, but it has yet to be enacted into law.
Extending the enrollment age alone would be unlikely to close the immediate income gap. Those who voluntarily continue enrollment after age 60 must pay the full contribution themselves, without an employer sharing the cost. For those who have lost their jobs and income, even securing additional enrollment periods is not easy. The Korea Labor Institute suggested that, if extending the retirement age immediately is difficult, rehiring retirees at their former workplaces could be used as a transitional measure.
Younger workers are not free from pension worries either. Last year, pension subscribers aged 18 to 29 numbered 4.127 million, down 267,000 from a year earlier. The enrollment rate also fell to 62.0% from 63.5%. Among all age groups, younger workers were the only ones to see both their number of subscribers and their enrollment rate decline.
Song Ju-hwa, head of the administrative statistics division at Statistics Korea, said the enrollment rate fell as a shrinking youth population combined with delayed entry into the workforce and reduced economic activity.
Starting enrollment later also means smaller pensions in retirement. In an Organisation for Economic Co-operation and Development (OECD) analysis cited in the National Pension Research Institute report, an average earner who entered the workforce five years late and then experienced 10 years of unemployment received a public pension amounting to only 69.7% of what a worker with a normal enrollment record would receive. In other words, the enrollment gap reduces the pension amount by 30.3%.
