`2 young people must support 1 senior citizen within 10 years`

A think tank predicts two people in the age range of 23 to 49 years will have to support one senior citizen in Korea in 10 years.

Mirae Asset Retirement Institute said Tuesday, “The ratio of senior citizens relative to the core productive population in the 25-49 age range who assist the elderly will increase from 31 in 2013 to 52 in 2023."

The ratio refers to the number of people aged 65 or higher divided by the number of the economically productive population. This means while 100 people between the ages of 25 and 49 must support 31 senior citizens this year, the same number will have to support 52 by 2023, or two for every elderly person.

According to this estimate, the time when two younger people will have to support one senior citizen will come 15 years earlier than predicted by Statistics Korea. The state-run office has generally calculated the ratio of senior citizens relative to the economically productive population by considering people in the latter category aged between 15 and 64 as the basis.

Based on this standard, Statistics Korea predicts that the ratio will reach 38.6 percent in 2030 and 57.2 percent in 2040. If this prediction is accurate, two younger people will have to support one senior citizen from the late 2030s.

Manager Kang Sang-hee at Mirae Asset Retirement Institute said, “Considering that the average retirement age in Korea is 53 and most people don`t work between 15 and 20 years old, the estimate based on the ratio of senior citizens to the economically productive population between ages 24 and 49 is far more realistic.”

Experts suggest that the government devise related policy and that individuals adequately prepare for a time when the younger generation will bear a significant burden to support the elderly.

Kim Jeong-geun, a senior researcher at Samsung Economic Research Institute, said, “Korea needs to establish an environment where people aged 65 or older can also engage in occupational activities to ensure post-retirement income,” suggesting efficient implementation of measures to raise the low birthrate to increase the core productive population.

A higher ratio of senior citizens to the core productive population could indicate that the elderly cannot afford to depend on youth, the middle aged and people in the prime of life for their livelihood. Experts say individuals should prepare for retirement through proactive asset management.

nuk@donga.com