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KMID : 1124020130290020135
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Korean Social Security Studies
2013 Volume.29 No. 2 p.135 ~ p.165
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The basic study to estimate the retirement risk of the middle and old age
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Kim Hon-Soo
Seok Sang-Hun
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Abstract
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To measuring the level of readiness of retirement life of pre-retirees, this study has focused on the method to estimate a targeted replacement rate and an expected replacement rate with more subjective and systematic way. Our findings are as follows: First, the readiness of retirement life of the middle and old age in Korea is not enough to pursue normal and stable retirement life. We estimated 74.5 of the targeted replacement rate of salary household and around 57∼64% of the expected replacement rate. Second, in the case of the targeted replacement rate, we considered the phenomenon that the consumption level before and after retirement could be substantial instead of taking the consumption smoothing hypothesis based on the life time utility maximization. Our results were not different with the results of the previous research. Third, the expected replacement rate is a little bit sensitive on whether an individual enrolls in the National Pension. It implies that many retirees may largely rely their retirement income on the National Pension benefits for retirement income and we need to build multi-level retirement income system as soon as possible under the circumstance of gradual decline of replacement rate of public pension.
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KEYWORD
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retirement readiness, retirement risk, a targeted retirement replacement rate, a expected retirement replacement rate
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