Western societies are much better prepared for retirement than we are. In the UK and the US, there is no mandatory retirement age. However, in our country, we often wonder if we need to keep working even after turning 60, and that thought should not even cross our minds. Yet, for many, the job market seems daunting. This is why some individuals pursue certifications. 

For example, let's assume two people start with 500 million won in financial assets at the age of 60. If they need 40 million won annually for living expenses and we assume an asset management return rate of 4%, one person decides to re-enter the workforce and covers their 40 million won living expenses with earned income. Meanwhile, they continue to manage their 500 million won in financial assets for another ten years. By the time they turn 70, their assets will have grown to 740 million won. 

On the other hand, the second person chooses not to re-enter the workforce and spends 10 million won annually starting at age 60. In that case, this person...

Now, when you turn 70, you will have 200 million won left. One person will start their retirement at 70 with 740 million won, while another will start with 200 million won. In this case, the game is over. The person who started with 200 million won will deplete their assets by the age of 76, while the person with 740 million won will maintain their assets well into their 100s. This is when the retirement game ends. 

What I want to emphasize here is that by the age of 60, you may have accumulated a significant amount of financial assets. The key is how you manage these assets during the 10 years from 60 to 70. If you can cover your living expenses with your earned income and allow your accumulated financial assets to grow with compound interest over those 10 years, your retirement preparation will be complete.

In the 60s, for a decade, re-employment is not a choice but a necessity. This is the key point. When compared to Western societies, they are much better prepared for retirement than we are, especially in terms of pensions. Typically, their retirement age ranges from 65 to 70 years. In Germany, it is 67 years, while in the UK and the US, there is no official retirement age. In Japan, the effective retirement age is around 55 years, although they are now considering 70 years. Small and medium-sized enterprises tend to have an earlier retirement age, while large corporations have a peak wage system but still maintain some retirement age. This is significantly earlier than in our case. 

In Western societies, the average period of contributions to public pensions is about 37 years, whereas in our country, it is currently around 27 years. This means that people in the West tend to retire about 8 to 10 years earlier. Therefore, retiring at 55 and doing nothing is an extremely risky behavior.

The reason why employment is generally considered essential in our country is that the overall working period is relatively short. Because it is short, we inevitably fill the remaining period through re-employment. Another point I want to mention is that since the government has set the retirement age at 60, we often base many aspects of our lives on this age. We start to think, Do I have to work beyond 60? Can I still work after 60? These thoughts can be quite common. However, we should not dwell on this mindset. We should not consider 60 as a benchmark. According to Western standards, we should remain in the labor market until around 65 to 70 years of age. Therefore, re-employment has become more of a necessity than a choice. Looking at the employment rate for those aged 60 to 64, the ratio of people who are employed is approximately...

It is about 64%. In their 50s, it is around 77%. Although this is about 133 percentage points lower, it is still a high level. So what I would like to suggest is that up to the age of 65 is essential, and from 65 to 70 is optional. How about organizing your thoughts that way? First of all, the authorities need to pay attention to this, and since it will take time for them to do so, individuals need to take action. Overall, re-entering an organization is not easy because everything is already set up. Therefore, whether through obtaining a certification or other means, individuals will seek re-employment. Generally, having a certification is considered a more certain path. This is because those with expertise find it easier to re-enter the workforce after retirement, so there is not much to worry about.

I'm not doing anything, but when I go and listen to the stories, I hear that there are about one or two places where they received offers, and they think they need to choose one. So those individuals have that expertise. However, general management positions lack that expertise, which makes re-employment daunting for them. That's why they are obtaining certifications. Many are preparing for this now. For example, the appraiser certification is quite a high-level qualification. Then there are those preparing for the housing management certification, as well as certifications related to agricultural product safety. There are also certifications in electrical technology, and some are studying for certifications related to trees. There is a wide variety of studies happening right now. A friend of mine, who is the same age as me, has already been retired for a little over a year, and there is a certification for tree doctors. Tree doctors require time...

It takes quite a while to obtain the certification and go through practical training, after which you receive a certification related to tree doctors. I am currently preparing for that step by step, and during this preparation, I also obtained a certification related to drones. One of the offers I received was for a job on Saturday and Sunday, which is when young people typically don't work. They asked if I could come to manage the grass at a golf course on those days. Since I currently have the certification, such opportunities are possible. Furthermore, one can develop their expertise based on what they have done throughout their life. In my case, my expertise lies in investment, as I have been involved in that field continuously. I have also worked on economic analysis and conducted research on retirement at a retirement research institute. So, these experiences...

All of this has come together to create my expertise in life asset management and retirement asset management. Those who are in technical fields can develop this expertise more easily, but for those in the humanities, it is not as straightforward. Therefore, these individuals build their expertise through certifications. Regardless, the term one-person diary is often used, and this diary signifies not just skills or technology, but also professionalism. Thus, we are entering an era of expertise. The reason young people are so focused on becoming doctors, lawyers, accountants, and tax advisors is that these are professional occupations. This is equally true after retirement. In the post-retirement market, it becomes even more important because I will not be entering an organization to work as a manager or assistant. Therefore, expertise becomes crucial as we move into the era of living a hundred years.

To prepare, I believe it is most important to develop either the skills I currently possess or to create new expertise, focusing on the idea of one person, one skill, and one area of specialization. I conducted a survey targeting individuals who have retired and re-entered the workforce. Some have re-employed in the same field, while others have transitioned to different fields, and there are also those who have taken on simple labor jobs. When I asked about the success factors for each group, I found that for those who moved within the same field, there are two key success factors: first, their expertise, and second, their network. Therefore, to transition within the same field, it is essential that one’s strengths and skills are recognized in that industry. When someone retires, it becomes important for them to be known for their capabilities in their previous company.

This means that there is a shift happening. When moving from one field to another, individuals carry their expertise and networks with them. Those with technical skills tend to transition well. However, when moving from one type of job to a different type, it involves a different set of expertise. According to surveys, the most important requirement during this transition is obtaining certifications. The second important factor is lowering one's expectations. As individuals move to a different field, their income may decrease, and they will face new environments. In such cases, it is essential to adjust one's expectations. This primarily applies to those in humanities or management. For these individuals, having certifications and lowering expectations are key success factors. When transitioning to simple labor jobs, there is no need for any special expertise. This could involve working in public labor or similar roles.

Recently, there is a drama called Day and Night, which depicts older individuals working in a local prosecutor's office, doing cleaning and similar tasks. These roles can be seen as simple labor or public work. When transitioning to such jobs, it is important to lower one's expectations. For instance, if someone used to hold a prestigious position, they might find it difficult to accept a job that seems beneath their previous experience. In Japan, older individuals have been taking on these types of jobs for a long time after retirement. Therefore, to shift into this kind of work, it is essential to adjust one's expectations.

If we consider the four overall factors—expertise, network, qualifications, and lowering expectations—these elements are crucial for re-employment. This conclusion comes from our survey results. Now, think about the used car market.

Look, when I say I'm selling a used car, if the used car is in very good condition, I get a fair price for it. If it has only been used for two or three years and is a good car, I receive its value. On the other hand, if I see a car that is already in terrible condition, I get a very low price for it. However, the cars that fall in between, whether they are quite good or bad, are treated similarly because it is difficult to distinguish between them. So, in colloquial terms, they are treated as if they are sold at wholesale prices. Those who have expertise or a good career tend to continue down that path when they seek employment. Those who have gone through bureaucratic processes continue to pursue that path even in retirement. It gives the impression that they have a clear direction and keep seeking those paths. Conversely, those who do not have such backgrounds tend to end up in the lower-income market, if we consider it in terms of used cars. The rest...

One aspect is that whether I did well or poorly, I am treated almost the same. So, people who were in mid-level jobs, or those in slightly higher positions, experience cultural shock. After I left, when I looked at the re-employment market, I thought, Oh, I used to be in a good position, but now I'm being treated like I'm in wholesale. This seems to be a characteristic of the re-employment market. Therefore, lowering one's expectations and adapting to a new environment are ultimately characteristics of the re-employment market, which shares traits with the used car market. It is said that if you are over a certain age, your applications won't even be reviewed. In the case of those in their 50s, they are generally considered to be in the age group before retirement. The employment government is also considering this labor market. Then, for those in their 70s, the Ministry of Health and Welfare is addressing this from a welfare perspective.

Currently, public work is being managed in this way. People in their 60s are in a gray zone. These individuals are not really part of the welfare system; they are too young to be considered as such. Moreover, they have surpassed the age limit set by the Ministry of Employment and Labor for general management, which makes their situation quite awkward. They are left to fend for themselves in this gray zone. Therefore, I continue to request that those in the gray zone be incorporated into the formal system, so that we can provide accurate statistics and data. It seems necessary to develop the labor market for those in their 60s to resemble a regular labor market. This is important because the proportion of people aged 60 and over among all employed individuals is already around 22 to 23%. This is significant; the fact that individuals in their 60s account for 22% of the total workforce is remarkable. Additionally, most new hires are predominantly in their 60s. Thus, the labor market...

This means that the market will continue to be important in the future. Therefore, there should be no complacency. Retirement bankruptcy can be fatal in many ways. If we define retirement bankruptcy, it occurs when I have necessary living expenses, but my income can no longer cover them. In such cases, one may have to live a life of extreme poverty, which significantly decreases the quality of life. Even if one has prepared well for these aspects, unexpected events can still lead to such situations. For example, if I retire with a lump sum and start a business, investing about 100 million won in renovations and starting up, but then after a year, the business fails, I would lose all the assets I had saved up until then. This can be a factor that unexpectedly accelerates retirement bankruptcy.

First, there is the issue of adult children’s education. It can be burdensome, especially when it comes to costs like wedding expenses. When I have some assets, I think, I should maintain some dignity when my child gets married, and I end up spending a lot on the wedding. However, later on, this can become unmanageable. Therefore, you need to control the wedding expenses for your adult children carefully. 

Next, many people fall victim to financial scams. They get tempted by high returns and think, I should invest this time to double my assets, only to find that instead of doubling, their investments can be halved. So, you need to be cautious when managing your assets and investing. Additionally, there is a risk of losing a significant amount of money due to financial scams. There have been many such incidents in the past, where acquaintances come to us...

When doing business, there are cases where you might be told to become the representative director, and while you are afraid of the capital, those people might take the capital and run away, leaving you with debts to bear and responsibilities to take on. Additionally, there are risks associated with financial scams and high-yield investments, which can accelerate bankruptcy after retirement. The fourth point is about divorce in later life; if someone in their 60s or 70s gets divorced, their assets can be cut in half. When two people live together, they only need one house and one TV, but if they live separately, everything needs to be newly established, leading to significantly higher costs. Lastly, there are serious illnesses. For general illnesses, we can manage costs through health insurance and similar means, which are not overly burdensome in our country. However, if one contracts a serious illness...

If you develop diseases such as cancer or cardiovascular diseases, unexpected expenses can arise, such as caregiving costs or expenses not covered by health insurance. The same applies to serious illnesses of parents. These five factors can be quite significant, and even if you are well-prepared, encountering such situations can hasten the risk of financial ruin in old age. Elizabeth Warren, a former professor at Harvard, is a bankruptcy expert. In her research on bankruptcy cases, she found that surprisingly, affluent couples often end up filing for bankruptcy. This is strange, but upon investigation, it turns out that these individuals tend to buy homes in areas with excellent school districts, similar to the expensive housing market in Gangnam, South Korea. They often take out loans to purchase these homes. However, if one of them loses their job...

When income is reduced by half, there is no way to manage this debt. This leads to bankruptcy. This is where the concept of financial fire drills comes into play. The question is whether we can manage our expenses even when one person in a couple loses their income. It is a kind of extreme stress test. We need to consider whether our cash flow remains stable when one person loses their income. Similarly, when re-entering the job market, I present this fire drill because research shows that when individuals leave their primary job and seek re-employment, their income typically decreases by about 40 to 50%. In other words, it is equivalent to one person in a couple losing their income.

Since it is going to be halved, this will lead to a significant change in spending patterns. For example, if I was earning 6 million won a month and then my income drops to about 2 million won, my income has drastically decreased. In this case, I need to check whether my spending patterns, compared to before, are still manageable. Why do I check this? Because I need to manage my debt, or I need to adjust my current spending habits from now on. One might think, I can just deal with it when the time comes, but changing spending patterns is not easy. There is a lot of resistance, and for instance, reducing dining out from twice a month to not at all is not simple. So what happens? While maintaining spending patterns, people tend to withdraw money from their accumulated assets. Gradually, as they keep taking money out, their accumulated assets can significantly decrease over time. Therefore, it is important to address the income situation now.

When considering that income will be halved upon employment, I need to check whether my interest payments and living expenses are not disproportionately high. If they are, I should start reducing my spending habits one by one from now on. This can be seen as a financial fire drill for those who will be re-entering the workforce, similar to the financial fire drill of the Matbly couple. Being healthy enough to work until the age of 90 is a blessing. However, there are people who struggle to work due to health issues. Yet, there are also those who continue to work because they are healthy. For instance, there are individuals who are still working at the age of 90. Additionally, there was Grandma Moses, an American woman who passed away, who began painting in her mid-70s and created 16 paintings before she died.

People do not work until they are 100 years old because they have to; rather, they do it because they find their work enjoyable and their health allows them to do so. If you live your life in this way, it is truly a happy existence. Therefore, maintaining a healthy life and enjoying the things you want to do, the things that bring you joy, until the age of 100 is a blessed life. Strive for that kind of life. However, not many people achieve this. Generally, there is still a mindset that one must work to a certain extent, which is influenced by the standard in our country that sets the retirement age at 60. This standard leads many to think that working after 60 means working for a long time. Instead of focusing on this standard, consider the benchmarks of Western countries and the era of living to 100 in our own country. Until about 65 years old, working is essential, and after 65, working becomes a choice.

If I can be healthy and do what I love, that is a blessed life. It would be good to envision a life of about 40 years in retirement.

"은퇴 쓰나미 몰려온다." 60대 이후 재취업하는 현실적인 방법 (김경록 박사 2부)

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