Working Past 65 Because Pensions Fall Far Short
Policies Needed to Help People in the “Pension Blind Spot” Build Contribution Histories
For A, a man in his 70s who spent his working life moving from one construction site to another and never held a regular employee ID card, pension income is about half that of people his age. Even at an age when he should be retired, he is back at work to make up for a shortfall in living expenses, unable to straighten his bent back. By contrast, B, a contemporary who spent his youth in regular employment, receives more than twice as much in pension income and enjoys a comfortable retirement.
Their sharply contrasting twilight years show how career histories in the labor market translate into disparities in pension income. A report titled “The Long-Term Impact of Past Labor Market Careers on Retirement Income: Focusing on the Role of Public Pensions,” published in the National Pension Research Institute’s latest issue of Pension Forum, No. 102, found that annual pension income for the “vulnerable labor market career group” – those who had accumulated fewer than 15 years in regular employment before age 60 or whose time in regular employment amounted to less than half their total working career – was just 51.2% of the overall average. Their average annual pension income was also KRW 3,669,000 less than that of the “core career group,” whose members had at least 15 years of regular employment. That amounts to a difference of about KRW 300,000 a month.
An elderly person collecting waste paper walks clutching a bottle of cold water in Yongsan-gu, Seoul, on Aug. 4, as the “Severe Heat Warning,” issued when heat poses a risk of casualties, was extended to all of Seoul, Gyeonggi Province and North Jeolla Province. 2026.08.04 Photo by Yoon Dongju.
Labor Market Gap -> Pension Gap -> “Cycle of Semi-Compelled Work”
The study examined men aged 65 to 80, using data from Waves 10 (2007) through 27 (2024) of the Korea Labor Institute’s Korean Labor and Income Panel Study. The report uses “pension income” to refer collectively to social insurance benefits. This includes the National Pension, special occupational pensions, workers’ compensation, veterans’ pensions, employment insurance and other social insurance programs. However, it added that “given that the subjects of the analysis are people aged 65 and older, benefits from social insurance programs other than public pensions and special occupational pensions account for a relatively limited share.”
One surprising finding is that there is little difference in total household income. The total household income of the vulnerable labor market career group was 97.7% of the overall average, indicating no major gap on the surface. In monetary terms, the annual difference was KRW 959,000. However, the report noted that individuals in the vulnerable group were 2.5 percentage points more likely to continue working after age 65, explaining that “some members of the vulnerable labor market career group supplemented their household income by remaining in the labor market into old age.” The bleak reality of people being forced to put off retirement and make up for the shortfall in their pensions is hidden in the household income figures. The fact that the world’s hardest-working elderly people are also the poorest underscores how many are driven to work to make ends meet, with their livelihoods on the brink. South Korea’s employment rate among people aged 65 and older was 37.3% (as of 2023), while the poverty rate for the same age group was 39.7% (as of 2024); both were the highest among OECD member countries.
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Public pensions are being discussed as a way to address the entrenchment of labor market disparities in income gaps among older people. The National Pension Service, for example, is pushing to expand credit programs for childbirth, military service and unemployment. These credits allow people to have periods added to their contribution records, increasing the amount they receive in the future. A similar initiative is the “Support for Young Adults’ First National Pension Contributions” program, which will take effect in 2027. More recently, a further-reaching proposal has also been under consideration: bringing 6.67 million people currently excluded from mandatory coverage because they have no income – including full-time homemakers and young adults aged 18 to 27 – into the regional subscriber category as people exempt from contributions. The aim is to open a path to pension benefits, even if they have to make retroactive contributions later. A proposal to raise the upper age limit for mandatory National Pension enrollment from the current 60 to 65 is also being discussed in conjunction with extending the retirement age.
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Oh Taehee, a professor at Incheon National University who authored the report, said, “Adjusting the eligible enrollment age alone will not be enough to adequately address the problem of securing retirement income for the vulnerable labor market career group.” He added, “Measures should be considered together to help people continue paying contributions in practice, including contribution support for low-income subscribers, encouraging people exempt from contributions to re-enroll, and strengthening enrollment management for the self-employed and workers in non-standard forms of employment.” He also noted, “The vulnerable career group includes both people exposed to the risk of low pension benefits and people who have accumulated assets through careers in self-employment, so the need for policy support and the form it takes may differ.”
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