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IMF recommends raising Korea's retirement age, overhaul seniority-based wages

Published: 26 Nov. 2025, 12:00 Updated: 26 Nov. 2025, 17:08

A view of the International Monetary Fund (IMF) logo at its headquarters in Washington is seen on Nov. 24, 2024. [REUTERS/YONHAP]

The International Monetary Fund (IMF) has recommended that Korea raise its official retirement age from 60 to 65, but only if accompanied by structural reforms — specifically increasing the national pension eligibility age to 68 and overhauling the country’s rigid seniority-based wage system.

It is unusual for the IMF to explicitly address the retirement policy of a specific country.

In a special report titled "Healthy Aging and Labor Market Participation in Korea," released on its website Wednesday, the IMF proposed that Korea extend its statutory retirement age to 65 while simultaneously raising the age to begin receiving National Pension Service benefits to 68.

The Organisation for Economic Cooperation and Development “has estimated that increasing the pensionable age to 68 years by 2035 could increase total employment by 14 percent and GDP by 12 percent by 2070,” the report said.

The findings underscore the importance of pursuing retirement age extensions and pension reform together to ensure the long-term sustainability of the pension system.

The IMF also warned that extending the retirement age without reforming Korea’s seniority-based wage structure could lead to adverse effects. It urged Korea to shift to a performance- and job-based pay system in tandem with retirement age reform.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY JEONG JAE-HONG [[email protected]]