[Financial Planning for the 100-Year Life] Finding Fulfillment in Later Life Through NPO Activities

"We often hear that the most reliable preparation for retirement in the era of 100-year lifespans is to remain active throughout life. But even if I have no worries about living expenses in retirement, do I really need to keep working?" This is a question I am occasionally asked during retirement planning lectures. It stems from the belief that post-retirement work is only related to financial concerns. However, there are many cases where people struggle after retirement not because of a lack of funds, but because they have nothing to do-especially those living in cities.

"In affluent countries, the degree of pain and anger is not greater due to a lack of material wealth. People become unhappy because they no longer feel needed by others or feel connected to society." This is a quote attributed to the Tibetan spiritual leader, the Dalai Lama. It likely reflects the reality that many people face emotional hardship in retirement, not because of financial difficulties, but because they have nowhere to go and no role to play. For this reason, in advanced countries like the United States and Japan, many retirees engage in social contribution activities that also provide a modest income. One such activity is participation in Non-Profit Organizations (NPOs).

Pure volunteer work is usually 100% unpaid, but NPO activities often include a small amount of compensation. For example, if the standard hourly wage is 10,000 won and a person receives 3,000 to 4,000 won for their work, the remaining 6,000 to 7,000 won is considered a contribution to society or a donation of talent. Even with social contribution activities, it is difficult to sustain 100% unpaid work over the long term. Therefore, providing compensation equivalent to transportation and lunch expenses allows capable volunteers to remain active for longer periods.

NPOs originally began in the United States in areas where government intervention was limited or where private companies could not operate due to profitability concerns. Since the 1990s, however, NPOs have undergone what some call an "NPO revolution," adopting management techniques from private companies and shifting from simple social contribution to seeking ways to generate revenue.

Although there are no official statistics, it is estimated that there are about 1.3 million NPOs currently operating in the United States. Of these, about half are involved in healthcare and welfare, around 30% focus on various educational activities, and the remaining 20% are engaged in other diverse fields.

In Japan, the government made significant efforts to promote NPOs in the mid-1990s, spurred by the aftermath of the Kobe earthquake. A representative example is the enactment and implementation of the "Act on Promotion of Specified Non-Profit Activities (NPO Act)" in 1998. The NPO Act is a special law under the Civil Code. In fields such as healthcare, welfare, education, environment, culture, and disaster relief, any group with at least ten participants can easily obtain legal NPO status through a simple process, even without basic assets.

Once an NPO acquires legal status, it can enter into contracts and its social credibility increases. It also becomes easier to receive commissioned projects, government subsidies, and donations, as well as to use public facilities. For these reasons, it is known that more than 50,000 NPOs have received legal certification in Japan. The number of retirees establishing or working at NPOs is also increasing, and related books are easy to find in bookstores.

In Korea, the number of registered nonprofit organizations reached approximately 13,900 as of the end of last year. However, it does not appear that these organizations are actively providing jobs to retirees who wish to engage in social contribution activities with some compensation. I hope that in the future, more retirees will establish organizations or find jobs within them. To achieve this, regulatory reforms for establishing organizations and the spread of a culture of giving must come first.

Kang Changhee, Head of Happy 100-Year Asset Management Research Association