[Financial Planning for the 100-Year Life] Early Retirement Strategies for Couples in Their 50s

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"I am a housewife in my mid-50s. My spouse has been offered an early retirement package. The retirement is happening sooner than we expected, and our prepared retirement funds are insufficient. I am considering whether I should look for a job, but after such a long career break, I feel lost." This was a question raised by an attendee at a recent retirement planning lecture.

Although we have entered the era of 100-year lifespans, the retirement age for office workers has not kept pace. According to a survey released by Job Korea at the end of last year, the average perceived retirement age among workers aged 40 and above was 51.8 years. Even for civil servants and teachers, whose retirement is relatively secure, most leave their jobs in their early 60s. Many people plan for retirement based on the time remaining after subtracting their current age from the average life expectancy of 84 years.

However, this is overly optimistic. Experts advise using the "age with a 20% survival probability" as a benchmark. Based on Statistics Korea data and expert analysis, a man born in 1980 has a 20% chance of living to 100, while a woman has a 20% chance of reaching 102. Another indicator, the modal age at death-the age at which the most people die-was found to be 92. Ultimately, this means people need to think about how they will live for 30 to 50 years after retirement.

According to last year’s Household Finance and Welfare Survey, the average net assets of households in their 50s is 511 million won. At first glance, this may seem substantial, but 84% of this is real estate, most of which is their primary residence. The actual financial assets available amount to 84 million won. It is difficult to make this last for 30 to 40 years. Many people, feeling anxious, jump into short-term investments like stocks or cryptocurrencies, only to lose their principal. In the end, all that remains is a single home, but if a long-term decline in real estate prices like in Japan occurs, it could lead to housing poverty.

Pension conditions are also not as favorable as in advanced countries. The average monthly payout from the National Pension is about 600,000 won. The average accumulated funds in retirement pensions and pension savings are 53.6 million won and 23.4 million won, respectively. Except for specially prepared groups such as civil servants and military personnel, most people face a shortage of living expenses after retirement. Unlike in the past, when people relied on support from their children, the intergenerational support structure is also collapsing. As a result, retirees have no choice but to find some form of work to supplement their insufficient living expenses.

Let’s look at Japan’s experience. According to the bestseller "The Truth After Retirement," most Japanese in their 60s to 80s have a monthly income of less than 2.5 million won, while their living expenses are around 3 million won. To make up the shortfall, retirees earn an additional 500,000 to 1 million won per month, and the employment rate for men in their 70s reaches 46%. The competition rate for apartment management jobs is as high as 50 to 1, and advertisements for "elderly-to-elderly care" (nono care) welcoming healthy seniors are common in nursing facilities. The growing social demand for care work has established it as a new field of employment. Other jobs include local cooperative committee members, computer instructors, corporate advisors, housekeeping services, and library assistant positions.

In contrast, in Korea, many complain that there are no jobs available even if they want to work. The Oxford Martin School at the University of Oxford predicts that nearly half of existing jobs could disappear by 2033. To work after retirement, people must find positions in fields that younger generations avoid or that require specific skills or physical abilities.

Real-life cases show that more people are letting go of their pride and seeking a second career. Former high-ranking civil servants are working in daytime senior care centers providing nono care, and former executives from large corporations are taking part-time jobs sorting parcels. Some women, after caring for family members, have obtained care worker certificates and continue to provide in-home care into their 70s. One such woman said, "It is rewarding and provides income," and recommends obtaining a certificate to others. A former branch manager of a foreign company is now driving a personal taxi, building a new life after retirement. Our society is now becoming one where it is natural to work in some capacity after retirement.

Kang Changhee, Head of Happy 100-Year Asset Management Research Association

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