Elderly Being Pushed into Poverty
A growing number of middle-class Koreans are descending into absolute poverty as they enter their twilight years.
The Korea Economic Research Institute found that 5.6 percent of middle-class households whose main breadwinner was 56 to 65 in 2006 ended up living in absolute poverty.
That means they were unable even to earn the minimum cost of living of W617,000 a month for a one-person household and W1.05 million for two (US$1=W1,108).
Analysis of middle-class households whose main breadwinner was 66 to 75 years in 2006 showed 9.23 percent ended up in absolute poverty.
The study tracked 999 out of 5,380 middle-class households in 2006 over a 10-year period. Extrapolating the findings to society at large suggests that 33,600 middle-class households whose main wage earner is 56 to 65 and 65,000 middle-class households whose main bread winner is 66 to 75 end up in poverty 10 years down the road.
As society ages the trend is only going to increase. An estimated 7 million baby boomers born between 1955 and 1963 face imminent retirement, and average life spans continue to increase. Most of these people are financially unprepared to support themselves in retirement.
Chung Soon-dol at Ewha Womans University said, "Korea is aging rapidly, and the rising number of middle-class senior citizens falling into poverty could hit us like a tsunami. If we fail to prepare, future generations could experience an even worse disaster."
In a survey by NH Investment and Securities of 1,128 middle-class people in their 30s to 50s, 39.9 percent of respondents said their monthly income after retirement would be less than W1 million. That means four out of 10 fear they will end up making less than the minimum cost of living.