"No Free Lunch in the World"... The 2nd Boomer with an Annual Income of 71.2 Million Won at Age 50 is Coming [Turning My Home into a Senior House]

The Growing Middle-Class Elderly Population Calls for Expanding Paid Care Services
From 2030, Those Born Between 1964 and 1974 Will Enter the Elderly Population
Annual Income in Their 50s Reaches 71.2 Million KRW
With Higher Savings and National Pension, Their Spending Power Is Greater
Universal Care for Middle-Class Seniors Must Be Expanded
"Service Fees Should Vary According to Economic Capacity"
Japan Also Introduced Paid Services a Decade Ago

▲On December 6 last year, the director of a Korean medicine clinic is providing home visit medical care to a single elderly household at an apartment in Daedeok-gu, Daejeon. Photo by Kang Jin-hyung

"There’s no such thing as a free lunch in this world. As the number of elderly people increases, the government won’t be able to handle feeding them and paying for their medical bills. If I enjoy everything for free, it’s my children and grandchildren who will suffer. They’ll have to pay all of it through their taxes. If I can afford it, I should pay with my own money and receive services with dignity." (76-year-old Cha Cheol-woo, who pays 40,000 KRW per visit for home medical services at his home in Daedeok-gu, Daejeon)

The income and education levels of elderly people in our country are steadily rising. This means that 'wealthy and well-educated' seniors will become the mainstream in a super-aged society.

Wealthy Second Baby Boomers Will Arrive in 2030

According to the '2023 Elderly Survey' released by the Ministry of Health and Welfare, the income of elderly people is increasing rapidly. In 2023, the annual household income of elderly people was 34.69 million KRW, more than double the 16.88 million KRW recorded in the first survey in 2008. It also increased by more than 4 million KRW compared to the previous survey in 2020 (30.27 million KRW). Education levels have also risen. The proportion of elderly people who graduated from junior college or higher increased from 5.9% in 2020 to 7.0% in 2023. The percentage of those who completed high school also rose from 28.4% to 31.2% during the same period.

The increase in wealthy and educated elderly people is expected to become more pronounced from 2030 onward. This is when the second baby boomer generation (born 1964?1974) will start to be included in the elderly population. The second baby boomer generation numbers 9.54 million, making it the largest single generation in our country.

▲On December 23 last year, Mr. Kazunai Ono (90) was reading a newspaper at a 'Small-scale Multifunctional Home' in Nagoya City, Japan. The grandfather lives at home, pays various expenses, and visits this place. Photo by Yujin Park (Nagoya)

A report titled 'Economic Impact Assessment of the Second Baby Boomers Entering Retirement Age' published by the Bank of Korea in July last year shows that the economic power of the second baby boomers significantly surpasses that of the first baby boomers. When the first baby boomers were in their 50s, their average annual income was 55.64 million KRW. In contrast, the second baby boomers earned as much as 71.20 million KRW in their 50s. Lee Jae-ho, head of the Bank of Korea’s Research Department, explained, "The second baby boomers have higher savings and national pension contributions, so they have relatively greater spending capacity."

As the number of economically capable elderly people increases, the direction of care services that help them continue living at home must also change. Until now, government support for elderly care has focused on those with severe illnesses, those diagnosed with dementia and receiving long-term care grades, or low-income groups. In fact, elderly people with financial means have been excluded from care policies and, if they do not receive care from their children, have had to leave their homes and move to facilities. To enable middle-class elderly people to live at home, ‘universal care’ must be expanded and sustained. For this, it is essential to set appropriate fees.

Reliable Care Services, Just Connecting Is Enough

Some local governments across the country are already trying this approach. Local governments play the role of creating a 'link between elderly people and care services.' Lee Jin-seon, head of the Integrated Care Team in Buk-gu, Gwangju Metropolitan City, said, "Middle-class seniors want to install safety grab bars in the bathroom or receive home medical visits, but there is no proper place to find such services." He added, "Even if someone comes to their home, the problem is whether the service quality is good and the price is reasonable." He said, "If city, county, and district offices find hospitals or interior companies that can provide these services and just connect seniors to them, it would greatly help elderly people continue living at home."

Buk-gu, Gwangju offers paid services. The amount paid varies according to economic status. For home medical visits, low-income groups pay 5% of the total cost, basic pension recipients pay 10%, and others pay 30%. Since one visit costs about 130,000 KRW, they pay approximately 6,500 KRW, 13,000 KRW, and 39,000 KRW respectively.

There are also services such as customized home exercise (50,000 KRW per session), home bathing (84,000 KRW per session), and annual house cleaning (up to 600,000 KRW per year). These services are free for low-income groups and basic pension recipients, but elderly people with financial means must pay the full amount. Lee said, "If services are free, everyone applies, so charging fees is necessary to know how many seniors actually need the services." He added, "Charging fees is also essential to accurately predict the budget and supply volume for care services."

Japan Started Charging Fees 10 Years Ago

▲Last November, Sachiko Watanabe (90), a grandmother living in Toyoake City, is being assisted by helpers from the "Chatto Service" (a service that helps the elderly for 30 minutes at 250 yen) as she enters her home. Photo by Yujin Park (Toyoake)

Japan introduced paid elderly care services much earlier than Korea. As the elderly population surged, it became difficult to guarantee service quality, and a shortage of care workers led to this measure. In the past, elderly people only had to pay 10% of the total cost of care services regardless of their economic status. However, since August 2015, fees have varied according to income level. If annual income including pension is 3.4 million yen (about 31.5 million KRW) or more, they pay 30%; if 2.8 million yen (about 26 million KRW) or more, 20%; and below that, 10%.

Hong Seok-cheol, standing member of the Low Birthrate and Aging Society Committee and professor of economics at Seoul National University, said, "The new elderly generation is economically strong, and policies are needed to encourage them to liquidate assets and spend on home care services." He added, "Since long-term care insurance funds are about to be depleted, it is inevitable to increase the personal burden for services."

He also said, "As the service demands of the new elderly diversify, it is necessary to standardize care such as medical services, meals, and household chores to revitalize this industry in the private sector." He emphasized, "Individuals should pay for the services they need and use them so they can live healthily at home."