At what age do South Koreans retire? Exploring the complexities

Oct 22, 2025 4 min read •

Retirement Employment South Korea

Despite a mandatory retirement age of 60 in many companies, the average age for South Koreans to leave their main job is significantly earlier, often in their early 50s. This disparity is driven by a complex interplay of legal structures, corporate policies, and economic pressures, which frequently push older workers out of stable, well-paying positions before they are ready to retire. This creates a notable gap between when South Koreans stop their primary career and when they begin receiving a pension.

Quick Summary

The effective retirement age for South Koreans from their main careers is considerably lower than the official mandatory age due to factors like the seniority-based wage system and early retirement programs. Many seniors re-enter the workforce in precarious, lower-paying jobs to supplement income, which is often insufficient from state pensions alone.

Key Points

Mandatory vs. Effective Retirement Age: While the legal retirement age is 60 in many larger companies, the average age South Koreans leave their primary job is much earlier, often in their mid-50s or even younger.
Early Exit Factors: Corporate policies, such as "peak wage" systems and early retirement programs, incentivize or force older, higher-paid employees to leave their stable positions.
Seniority System's Role: The traditional seniority-based wage structure can make older workers financially burdensome for companies, contributing to pressure for early retirement.
Necessity for Re-employment: A gap exists between leaving the main job and receiving a pension (which can be claimed at 65), forcing many to re-enter the workforce in less stable, lower-paying roles.
Elderly Employment Trends: Despite high employment rates for older adults, the work is often low-quality, physically demanding, and precarious, leading to a high elderly poverty rate.
Generational Friction: Discussions about raising the retirement age create tension between older and younger generations, who hold differing views on its impact on job opportunities and productivity.
Systemic Challenges: Inadequate social security and discriminatory employment practices contribute to financial insecurity for older workers, highlighting the need for systemic reform.

The official versus effective retirement age

South Korea's employment landscape shows a clear divide between the official mandatory retirement age and the average age at which workers typically leave their primary careers. While the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion often sets a mandatory retirement age of 60 in larger companies, the actual age of exit is often much earlier. Data from 2021 indicated an average retirement age around 49, while a 2025 survey found those already retired did so at an average age of 56, even though non-retired individuals hoped to work until 65. This earlier exit is particularly common in large corporations where early retirement programs are prevalent.

Why do South Koreans retire early from main jobs?

Several factors contribute to this earlier departure. The historical seniority-based wage system meant higher salaries for long-term employees, which can be a financial strain for companies. To mitigate this, some companies use a "peak wage system" that reduces older workers' salaries before mandatory retirement and offer "honorary retirement" packages that act as financial incentives for early departure. These practices can lead to involuntary early retirement; a 2019 survey found that 76% of early retirements were not voluntary. Older workers may also face perceptions of lower productivity, contributing to pressure to leave and making way for younger, less expensive staff.

The necessity of re-employment and the 'income vacuum'

Leaving a primary job in the 50s doesn't always mean full retirement. The National Pension may not be available until age 65 for those born in or after 1969, creating a significant "income vacuum". This financial gap often necessitates re-entering the workforce, frequently in precarious jobs with lower wages and fewer benefits. The need for income was a key reason cited by a record number of South Koreans aged 55 to 79 who were working in May 2025.

Reasons for Early Retirement and Post-Retirement Employment


Factor	Impact on Early Retirement from Main Job	Resulting Employment Conditions	Explanation
Seniority-based Wage System	Creates incentive for companies to reduce labor costs by phasing out older, higher-paid workers.	Lower wages, precarious jobs, and less secure employment in the post-retirement period.	Companies facing high costs due to senior employees' wages encourage or force early retirement, often through involuntary programs.
Peak Wage System	Reduces older workers' salaries before the mandatory retirement age, encouraging early departure.	Drives experienced workers toward involuntary early retirement.	The system aims to lower costs but pushes employees out, sometimes with limited prospects for meaningful re-employment.
Involuntary Early Retirement Programs	Pressure from corporations, especially large ones, pushes workers out with financial incentives or restructuring.	Increased entry into the informal and unstable labor market for many older Koreans.	These programs, often described as 'voluntary', lead to non-voluntary exits for many workers.
Demographic Shifts	Concerns over an aging population and slow economy lead to discussions on labor market reforms.	High rates of elderly employment, often in lower-quality, temporary jobs.	A rapidly aging society creates pressures for a longer working life, but the market often only provides low-quality jobs for seniors.
Income Vacuum (Gap before Pension)	The age for receiving the National Pension is often higher than the age of leaving a main job.	Necessitates re-entering the workforce in whatever capacity is available.	The financial need drives many to continue working, despite poor conditions, until they are eligible for their pension.

Challenges facing older workers

Older workers face challenges like age discrimination, sometimes permitted by laws exempting certain mandatory retirement programs. The perception that older workers are a "burden" due to seniority wages pushes them into less favorable employment. Despite increased employment rates for those over 65, many hold physically demanding, low-wage jobs, leading to occupational segregation in precarious roles.

Economic difficulties and insufficient pensions contribute to South Korea's high elderly poverty rate among OECD countries.

The path ahead

With an aging population, discussions continue about raising the mandatory retirement age and reforming the wage system. However, these ideas face opposition from younger generations worried about their job prospects. Businesses may also prefer rehiring retirees on less favorable terms over extending the retirement age for existing staff. Comprehensive reforms are needed to address labor fairness, social security adequacy, and economic sustainability for the aging society. You can find more details on discriminatory practices in a Human Rights Watch report from July 2025.

Conclusion

While South Korea's official mandatory retirement age is 60, many workers leave their main jobs earlier, often around their mid-50s, driven by corporate practices like early retirement schemes and peak wage systems influenced by the seniority-based wage structure. This creates an "income vacuum" before pension eligibility, pushing many into unstable, lower-paying re-employment. The result is a high elderly poverty rate despite high senior workforce participation. Addressing the challenges of an aging population requires balancing economic needs with ensuring stable and dignified employment for older Koreans.

Frequently Asked Questions

While the mandatory retirement age in many larger South Korean companies is legally set at 60, workers often retire from their primary job much earlier. Smaller companies are less likely to have a mandatory retirement age due to labor shortages.

South Koreans often leave their main jobs earlier due to corporate practices like "honorary retirement" or voluntary redundancy programs, which offer incentives to exit early. The seniority-based wage system also makes older workers more expensive, prompting companies to reduce costs by encouraging their departure.

An "income vacuum" refers to the financial gap many Koreans face between the time they leave their main job and when they become eligible to receive their National Pension, which can be up to 65 years of age. This financial pressure often forces people to seek re-employment.

Yes, many South Koreans, particularly those aged 55 to 79, continue working or actively seek work after leaving their main job, often out of financial necessity. However, this re-employment is frequently in less stable, temporary, and lower-paying positions.

A "peak wage system" is a controversial corporate policy in some companies that reduces the wages of older workers in the years leading up to their mandatory retirement. While intended to lower labor costs, critics argue it can lead to age discrimination and encourage involuntary early retirement.

South Korea has a rapidly aging population, which fuels discussions about raising the retirement age to address labor shortages and economic challenges. However, this also creates generational tensions and pressure on existing retirement systems.

The elderly poverty rate in South Korea is one of the highest among developed nations. This is linked to involuntary early retirement, insufficient pension payments, and the lack of stable, decent-paying jobs available for seniors who must re-enter the workforce after leaving their main careers.

References

Medical Disclaimer

This content is for informational purposes only and should not replace professional medical advice. Always consult a qualified healthcare provider regarding personal health decisions.