National Pension Not Reduced Even With Annual Salary of 75 Million Won: Revised Reduction Standards

South Korea has adjusted its National Pension regulations, making it easier for seniors to receive their full pension benefits even if they continue to work after retirement. The recent amendment to the National Pension Act has raised the threshold for pension reduction, a move designed to offer greater financial flexibility and security to the elderly.

Previously, retirees receiving pension benefits would face a reduction if their average monthly income exceeded a certain benchmark, known as the 'A value,' which represents the average income of all National Pension subscribers over the past three years. However, the law has been revised so that the income threshold is now the 'A value' plus 2 million won. Consequently, individuals with a monthly income below 5.19 million won (based on 2026 figures) are now eligible to receive their full pension without any deductions.

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The pension reduction system for retirees with employment income has long been a sensitive issue.

For salaried workers, the calculation considers their income after tax deductions. This means that individuals with an annual gross salary of approximately 75.86 million won are now exempt from pension reductions. The NH Investment & Securities' 100세시대연구소 (100-Year Life Institute) published a report detailing these changes, emphasizing that financial income, private pension receipts, and other income sources are not included in the calculation for pension reduction.

The report also outlines strategies for retirees to manage their post-retirement income, including increasing the proportion of private pensions and utilizing deferred pension schemes. Adjusting working months to lower the average monthly income is also presented as a method to avoid pension reductions. The institute highlighted that the pension reduction system has long been a sensitive issue for retirees, and this report aims to clarify the revised standards and provide guidance for comprehensive retirement income planning.

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This report is designed to help establish retirement income strategies that comprehensively consider the National Pension, private pensions, and health insurance.