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http://dx.doi.org/10.5351/KJAS.2015.28.4.763

Estimating an Adequate Income Replacement Rate and Suggesting Roles for Pension and Non-Pension Incomes  

Kang, Sungho (Department of Aging Research, Korea Insurance Research Institute)
Kim, DaeHwan (Department of Economics, Dong-A University)
Publication Information
The Korean Journal of Applied Statistics / v.28, no.4, 2015 , pp. 763-779 More about this Journal
Abstract
This study estimate the adequate replacement rate of retirement income by income brackets and suggests roles of pension and non-pension income sources to achieve it for each income bracket. Priori research focused on elderly poverty; however, there has been little discussion about an adequate income level for retirement. We calculate an adequate income replacement rate separately for the poor, middle, and high income group as well as the average level of replacement rate for all groups. We also investigate the gap between the adequate income replacement rates and realized rates, and propose roles for each income source to curtail the gap. It is essential to recognize that the adequate income for retirement is unable to be met only by an annuity. To emove the gap, it is vital to utilize non-pension income although annuity is a primary source for retirement. Especially, the public and private pension plays a role to overcome poverty and live affluent in retirement, respectively.
Keywords
income replacement rate; public pension; private pension; aging population;
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