Retirement Age Extension:

 Problems and Alternatives from the Perspective of Korea’s Younger Generation

Lee Dong-soo

Representative of the Institute for Generational Politics

1. Introduction

The drama The Story of Department Head Kim, Who Owns a Home in Seoul and Works for a Large Company (hereinafter Manager Kim), which aired at the end of 2025, drew wide attention for its realistic portrayal of the sorrows and struggles of middle-aged breadwinners in their 50s. The protagonist, who regards his employment at a solid large corporation as the defining achievement of his life, falls behind in performance and loses out in office politics, ultimately being demoted to a regional factory. The company, seeking to reduce headcount, pressures him to take voluntary retirement, and in the end “Manager Kim” leaves the company that had meant everything to him and begins a second chapter in life.

Manager Kim tells the story of a man who had overestimated himself as a department head at a large corporation and behaved arrogantly, only to be pushed out of the company and set out in search of his true self and genuine happiness. Yet the drama is not one-dimensional: it also depicts his failed business venture and his experience of falling victim to a real-estate pre-sale scam. This storyline struck a chord with middle-aged and older viewers who are approaching retirement, or who know they will one day face it, and generated extensive discussion. At the center of that discussion was, above all, the issue of extending the retirement age.

On June 16, 2026, Korea’s two major labor federations, the Federation of Korean Trade Unions and the Korean Confederation of Trade Unions, held a press conference urging the political community to immediately legislate an extension of the mandatory retirement age. They opposed the phased retirement-age extension reportedly being considered by the Democratic Party of Korea’s Special Committee on Retirement-Age Extension, citing the income gap that would remain. They also objected to the establishment of a special provision under the rules of employment that would allow wage-system reforms without union consent while raising the statutory retirement age, calling it a “rollback of working conditions.”

The generations that stand to benefit most directly from an extension of the retirement age are those in their 40s and 50s. They are both the core base of labor unions and a key support group for the current ruling bloc. In demographic terms as well, they account for one of the largest shares of Korean society, together with those in their 60s. People in their 50s number about 8.58 million, the largest group at 16.64%, while those in their 40s number about 7.62 million, or 14.77%, placing them behind only those in their 60s, who number about 7.98 million, or 15.46%. By contrast, those in their 30s number about 7.03 million, representing only 13.64% of the total. People in their 20s are fewer still, at 11.41%, or about 5.88 million. Given the political calculus based on the number of voters, there is a considerable possibility that the current debate over retirement-age extension will proceed in the direction demanded by labor. The more this happens, the more the voices of future generations, including those in their 20s and 30s, are likely to be excluded from the policy-making process.

2. Core Issues and Points of Contention in Extending the Retirement Age

The standard of a “statutory retirement age of 60” first appeared in Korea with the enactment of the Elderly Employment Promotion Act in 1991. After democratization, workers’ rights improved, and as the retirement of the generation that had driven industrialization came into view, employment stability up to the point of entering old age began to be discussed in earnest. In the early stage of the system, however, the retirement age was merely a non-binding recommendation, stating that “where an employer sets a retirement age for workers, efforts should be made to ensure that the retirement age is 60 or above.” In 2013, the government amended the law to make a retirement age of at least 60 mandatory. The requirement applied to workplaces with 300 or more regular employees.

The recent resurgence of debate over retirement-age extension stems from the fact that, while the system has remained unchanged, individual life expectancy has risen sharply. In 1990, when the retirement-age system was first introduced, life expectancy in Korea was 71.7 years; by 2024, it had increased to 83.7 years. In just 34 years, it rose by 12 years. Another issue often raised is the gap before National Pension benefits begin, the so-called “income cliff.” Those born in or before 1952 receive pension benefits from age 60. Through successive pension reforms, however, the pension eligibility age has gradually risen. For those born in 1969, benefits begin at age 65. The core argument of those who support extending the retirement age is that people who retire at 60 must bridge the income gap until they begin receiving pension benefits at 65. Japan and Germany, among others, have also addressed retirement-age policy by linking it with the pension eligibility age in order to narrow this income gap. In particular, Japan, which entered a super-aged society before Korea, fully mandated employment up to age 65 for workers who wish to continue working as of April 2025. It is now moving toward a retirement age of 70.

The retirement-age extension proposals being discussed by the Democratic Party of Korea and the People Power Party are not significantly different in broad outline. The Democratic Party’s Special Committee on Retirement-Age Extension is reportedly discussing measures such as gradually raising the current retirement age to 65 and temporarily easing procedures for changing rules of employment in order to adjust working hours and reform the wage system for those subject to the extended retirement age. The People Power Party, meanwhile, is responding through individual bills proposed by its lawmakers. In general, these bills oppose a uniform increase to age 65 and include measures such as differentiated wage payments or post-retirement re-employment in order to reduce the burden on employers. The real divide lies between business and labor. The business community prefers a flexible approach centered on re-employment after retirement rather than a legal extension of the retirement age. Labor, by contrast, argues, as noted above, that the retirement age should be raised to 65 as soon as possible and that current working conditions must not be undermined.

3. Public Opinion on Extending the Retirement Age

The extension of the retirement age is often framed as a conflict between younger generations and older generations. It is true that concerns continue to be raised that extending the retirement age could dampen new hiring. Based on public opinion polls alone, however, it is difficult to say that young people are expressing clear opposition. In a regular survey conducted in the second week of November 2025, Gallup Korea asked about extending the retirement age. Among those aged 18 to 29, 71% supported raising the statutory retirement age to 65, while 21% opposed it. Among those in their 30s, 77% were in favor and 15% opposed. Among those in their 40s, support stood at 79% and opposition at 17%. Among those in their 50s, 69% supported the idea and 26% opposed it; among those in their 60s, 71% supported it and 23% opposed it. While the intensity of support was higher among those currently in the workforce, the data do not suggest strong opposition among young people.

Although the issue may work against their own employment prospects, support for retirement-age extension appears high among young people because multiple interests coexist within a single household. For younger generations, extending the retirement age may be an obstacle to their own employment, but it also extends their parents’ working lives. The expected value of the latter is greater. The jobs newly created by someone’s retirement at age 60 are an uncertain reward. By contrast, the household income gained through the extension of a parent’s retirement age is a certain reward. Therefore, rather than viewing retirement-age extension simply as a clash of interests between generations, it should be examined from the perspective of the broader employment structure, including generational dynamics.

4. Problems with Extending the Retirement Age

1) An Agenda Centered on Large Corporations and Public Institutions

The problem with the form of retirement-age extension currently demanded by labor is that its benefits would accrue only to regular employees at large corporations and public institutions. Already, whether a retirement-age system is actually in place differs sharply depending on workplace size. According to a June 2024 survey by the Ministry of Employment and Labor, only 21.8% of all workplaces guaranteed employment until the retirement age. The gap between large companies and small and medium-sized enterprises is significant: 95.3% of large companies with 300 or more employees operate a retirement-age system, while the figure for microbusinesses with fewer than five employees is only 12.1%.

In small and medium-sized enterprises, the very concept of a retirement age may be largely meaningless. Regardless of whether such a system exists, relatively few people remain employed until retirement age. Among regular employees in 2024, the average tenure at workplaces with 300 or more employees was 10.9 years for men and 8.9 years for women. At small workplaces with five to nine employees, however, the corresponding figures were 6.3 years for men and 5.3 years for women. The situation is similar in manufacturing jobs. In sectors shunned by young people, some firms would have to worry about going out of business because of labor shortages if they could not retain middle-aged and older workers who are already well past the statutory retirement age. Shipbuilding and construction companies, among others, maintain their workforce by rehiring skilled workers who have passed the retirement age of 60. In short, outside a limited number of “good jobs” at large corporations and public institutions, the debate over retirement age itself is essentially meaningless.

2) A Further Contraction in Youth Employment

The core argument against extending the retirement age to 65 is that it would worsen youth employment. Many Korean companies use a seniority-based wage system under which wages rise with years of service. According to the BOK Issue Note “A Super-Aged Society and Measures for Continued Employment of Older Workers,” published by the Bank of Korea in April 2025, the wage of a worker with 30 years of tenure in Korea is about 3.4 times that of a first-year new hire. The European Union average is 1.7 times, and Korea’s figure is even higher than Japan’s 2.5 times, despite Japan being known for relatively strong wage seniority. Since the release of ChatGPT in November 2022, new hiring has fallen sharply not only for general office workers but also for developer positions. In this environment, extending the retirement age of existing workers would inevitably reduce the capacity to hire new workers.

Moreover, Korea’s employment system is highly rigid, making dismissal virtually impossible except in special circumstances. Once a person is hired, it is difficult to let that person go. If the retirement age is extended without wage reductions, as labor demands, companies’ labor costs are bound to increase significantly. As a result, this could become a driver that effectively forces companies to replace labor with AI, thereby further weakening youth employment.

5. Alternative: Focus on Eliminating Age-Based Employment Discrimination, Not on Guaranteeing Retirement-Age Protection

Unlike the 2025 National Pension reform, which was framed as “pay more and receive more,” there is no clear opposition among young people to extending the retirement age. This appears to be because even younger generations share an implicit consensus that, in a situation where the population has been declining since 2020, more people need to work for longer. Indeed, longer working lives across generations are not necessarily bad for young people. They can help defend against a decline in potential growth and reduce the future burden on younger generations in areas such as the National Pension and health insurance.

However, extending the retirement age in the form currently demanded by labor, without accompanying reform of the wage structure, is likely to function as a privilege for a specific generation and for a small minority of jobs. Because the issue is still at the discussion stage, public opinion has not reacted strongly. But if “retirement-age extension without wage cuts” is introduced, opposition among young people is expected to spread. With open recruitment at large companies having already declined sharply since the 2020s, adding a retirement-age extension would inevitably worsen the employment difficulties faced by young people.

The core purpose of extending the retirement age is to bridge the income gap before pension benefits begin. If that purpose is kept in mind, it is necessary to consider alternatives in a broader framework, rather than focusing on a retirement-age extension that would apply only to regular employees at large corporations and public institutions. Many overseas cases are worth considering. The United States, which has no statutory retirement age, adopted the Age Discrimination in Employment Act in 1986 to protect the right of older workers to work. Rather than simply extending the retirement age, it focused on eliminating age-based discrimination in employment. The employment rate of Americans aged 65 and over hovers above 20%, and it is common for people to continue working into their 70s. Singapore implemented the Retirement and Re-employment Act in 2012, guaranteeing employment up to age 68 while allowing employers not to maintain the existing wage system, thereby reducing their burden. If the debate centers on whether one supports or opposes extending the retirement age, it will be difficult to win the consent not only of older generations but also of young people. A more effective way to persuade younger generations would be to focus instead on how to guarantee the right to work beyond age 60 and how to reduce the resulting burden on companies.

Note: The views expressed herein may differ from those of the Hansun Foundation

(※ It's a translation based on machine translation)