How Raising the Senior Age to 75 Could Save South Korea 603 Trillion Won in Pension Costs

Translation result
A study found that raising the official age that defines a senior to as high as 75 could cut basic pension spending by up to 603.4 trillion KRW (about $452.6 billion).

According to the Policy Research Information System (PRISM) on the 27th, Hongik University’s Industry‑Academic Cooperation Foundation submitted a report titled “The Silver Age and Public Finances” to the Ministry of Strategy and Finance (now the Office for Budget and Planning) in November of last year.

The report examined the fiscal effects of gradually increasing the senior age threshold from the current 65. It noted that aging has driven a surge in senior-related welfare spending, yet the statutory threshold—set at 65 in the Elderly Welfare Act of 1981—has not been adjusted since.

Specifically, the basic pension paid to the bottom 70% of people aged 65 and over cost 24.3 trillion KRW last year (about $18.2 billion), roughly 0.91% of GDP. If the senior population and inflation continue at their current pace, that annual figure could grow to 58.9 trillion KRW by 2050 (about $44.2 billion).

The report modeled three scenarios for how changes to the senior cutoff would affect basic pension financing. The first scenario raises the cutoff by one year every five years beginning in 2033, moving from 65 to 70 by 2058. Under that plan, 40-year pension costs would total 1,871.6 trillion KRW (about $1.40 trillion), a savings of 203.8 trillion KRW (about $152.9 billion) compared with maintaining the status quo.

The second scenario raises the cutoff by one year every two years starting next year until it reaches 70. Over 40 years, required funding would total 1,702.9 trillion KRW (about $1.28 trillion), reducing costs by 372.5 trillion KRW (about $279.4 billion) versus the current policy. This scenario was proposed by academics and civic groups.

The third scenario links the senior age to remaining life expectancy—defining “senior” as the age at which remaining life expectancy falls to 15–20 years—and allows increases up to a maximum of 75. Under this approach, the age would rise by one year every two years from 65, then shift to one year every five years starting in 2036, reaching 75 by 2056. This option yields the largest savings, an estimated reduction of 603.4 trillion KRW (about $452.6 billion).

The report concluded that faster or larger increases produce greater fiscal savings. It also warned that, as population aging advances, the central government’s share of total fiscal needs is likely to grow—meaning up to 90% of the savings would fall to the national government.

The government has begun to formalize plans to adjust the basic pension. Park Hong-geun, minister of the Planning and Budget Office, said at his first press briefing on the 21st that he could prepare a reform plan within the year. Still, officials expect the government to focus more on strengthening support for low-income seniors than on raising the senior age. President Lee Jae‑myung wrote on X on the 16th of last month, “To reduce elderly poverty, we may need to change the basic pension,” and suggested a progressive approach that provides more support to lower-income seniors—ha-hu-sang-bak. {vi19}