Koreans only have an average of 34 years of income surplus

[Photo by Yonhap]

South Korean people’s personal finances show a surplus from the age of 27 before transitioning to a ‘life in deficit’ at the age of 61, where income is less than consumption, data showed on Tuesday. Given that the period when labor income exceeds consumption begins at the age of 27, generating a surplus in life only lasts for 34 years.

According to the ‘2021 National Transfer Accounts’ released by Statistics Korea on Tuesday, Koreans’ surpluses peaked at the age of 43, hitting 17.92 million won ($13,905), before turning into a deficit from the age of 61. National labor income also peaked at the age of 43, hitting 39.06 million won.

The National Transfer Accounts is a statistic that identifies the relationship between consumption and labor income with a focus on changes in age. It is compiled to prepare for future risks, including the financial burden on the government and households due to changing demographics. The lifecycle deficit per capita peaked at 35.27 million won at age 17.

The age of entering the surplus zone has remained constant at 27 to 28 years old, while the age of re-entering the deficit is gradually getting later. It was delayed by 5 years from 56 years in 2010 to 61 years in 2021, suggesting that the working population among the elderly is increasing alongside the aging population.

As of 2021, total consumption was 1,148.8 trillion won, and labor income was 1,040 trillion won, with consumption exceeding labor income. The lifecycle deficit, which is consumption minus labor income, was approximately 108.8 trillion won, up 11.6 percent year-on-year. Public health consumption rose 12.6 percent year-on-year to 103.6 trillion won, contributing to the overall growth in consumption in the public sector.