SMEs propose generational coexistence model for retirement age extension

Experts and industry leaders at a recent forum hosted by the Korea Federation of SMEs proposed a ‘generational coexistence’ model to address the potential impacts of extending the legal retirement age. With discussions in the National Assembly regarding raising the retirement age to 65, it is estimated that approximately 1.48 million regular employees in small and medium-sized enterprises (SMEs) could be affected over the next five years.

Data indicates that the proportion of workers aged 50 and older in SMEs has risen to 44% as of 2025, surpassing the proportion of younger workers. To prevent retirement age extensions from displacing youth employment, experts suggested providing tax incentives and financial support to companies that simultaneously increase the employment of both young and elderly workers.

Disparities between SMEs and large corporations were also highlighted. The average monthly wage for regular employees aged 55–59 in SMEs is approximately 3.72 million won, which is about 65% of the 5.72 million won earned by their counterparts in large corporations. Industry representatives emphasized that instead of a uniform legal mandate, flexible continued employment models tailored to specific corporate conditions and fiscal support are necessary to retain skilled labor and mitigate existing labor shortages.