Addressing Elderly Poverty in Korea's Super-Aged Society

Bank of Korea Governor Rhee Chang-yong has highlighted a dual strategy to tackle the escalating issue of elderly poverty in South Korea, now officially a super-aged society. The approach focuses on the annuitization of elderly assets and comprehensive labor market reforms.

The Urgent Need for Financial System Overhaul

Rhee pointed out the structural issue at the heart of Korea's elderly poverty problem: the inability to monetize assets. With an elderly poverty rate of about 40%, the highest among OECD countries, the situation demands immediate action. "The generation that built our industrial foundation deserves better in their later years," Rhee remarked, underscoring the community's responsibility.

Annuitization: A Path Out of Poverty

Emphasizing the potential of asset annuitization, Rhee shared BOK estimates suggesting that over 1.22 million elderly could escape poverty if assets like housing were converted into living expenses. The activation of housing pensions could generate an annual cash flow of 34.9 trillion won, offering a viable solution to the crisis.

Labor Market Reforms for Sustainable Employment

Rhee also addressed the challenges of elderly self-employment, with many entering unprepared and earning less than 10 million won annually. He advocated for policies to extend retirement ages and reform seniority-based wages, ensuring stable employment for the elderly without disadvantaging the youth.

A Collective Responsibility

Concluding his remarks, Rhee called for a societal effort to address elderly poverty, emphasizing the need for dignity in aging. "It's not just an individual challenge but a future we must prepare for together," he stated, highlighting the symposium's role in fostering dialogue on aging-related economic changes.