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Households with largest income cutting back on spending as retirement approaches
By KH디지털2Published : March 10, 2015 - 10:50
Families whose main breadwinner was in his or her 50s were found to have slashed their spending last year despite having the largest average income among all age groups, a government report showed Tuesday, reflecting growing concerns about retirement and the future economy.
The average consumption propensity of such households stood at 69.7 percent, the lowest of any demographic group, according to Statistics Korea. The propensity average is the ratio of total consumption spending to disposable income.
Average monthly income for these households was 4.95 million won ($4,430) with disposable income hitting 3.96 million won. The average for all age groups was 4.3 million won in income and 3.5 million won in disposable income.
The statistical agency said the propensity average for the 50s group is roughly the same as households whose main income earner is in his or her 60s, whose monthly disposable income is 2.81 million won.
The drop is noteworthy because the average had stood at 75.4 percent in 2003, the highest of any age group in that year.
"The drop can be seen as a sign that people in their 50s are taking into account their retirement and the need to save up, which is causing them to regulate their spending," the statistical agency said.
Retirement age varies by occupation but most people leave work in their late 50s.
This cutback in spending occurred across the board last year, even as the income rose, according to the agency. The national average propensity stood at 72.9 percent in 2014, the lowest tally since corresponding data was compiled from 2003 onwards.
Economic experts say the trend is related to growing anxiety about the overall well-being of the economy.
The government said Asia's fourth-largest economy grew 3.3 percent in 2014. It set this year's growth target at 3.7-3.8 percent, but many view it as being too high. The Bank of Korea projected 3.4 percent growth.
In addition, the rise in the country's life expectancy may be exerting influence.
"With people expected to live longer, there is considerable pressure on people in their 50s to save," Kwon Kyu-ho, a research fellow at state-run Korea Development Institute, said. (Yonhap)
The average consumption propensity of such households stood at 69.7 percent, the lowest of any demographic group, according to Statistics Korea. The propensity average is the ratio of total consumption spending to disposable income.
Average monthly income for these households was 4.95 million won ($4,430) with disposable income hitting 3.96 million won. The average for all age groups was 4.3 million won in income and 3.5 million won in disposable income.
The statistical agency said the propensity average for the 50s group is roughly the same as households whose main income earner is in his or her 60s, whose monthly disposable income is 2.81 million won.
The drop is noteworthy because the average had stood at 75.4 percent in 2003, the highest of any age group in that year.
"The drop can be seen as a sign that people in their 50s are taking into account their retirement and the need to save up, which is causing them to regulate their spending," the statistical agency said.
Retirement age varies by occupation but most people leave work in their late 50s.
This cutback in spending occurred across the board last year, even as the income rose, according to the agency. The national average propensity stood at 72.9 percent in 2014, the lowest tally since corresponding data was compiled from 2003 onwards.
Economic experts say the trend is related to growing anxiety about the overall well-being of the economy.
The government said Asia's fourth-largest economy grew 3.3 percent in 2014. It set this year's growth target at 3.7-3.8 percent, but many view it as being too high. The Bank of Korea projected 3.4 percent growth.
In addition, the rise in the country's life expectancy may be exerting influence.
"With people expected to live longer, there is considerable pressure on people in their 50s to save," Kwon Kyu-ho, a research fellow at state-run Korea Development Institute, said. (Yonhap)
