How the Korean national pension amount is worked out

1. What decides the amount

The old-age pension has two halves. One comes from the average income of all insured persons; the other from your own average income, the basis of the contributions you paid. The statute calls the first the A value and the second the B value. They are mixed deliberately, so that a lower earner gets back more than they paid in proportion. For the same period, someone on half the income does not get half the pension; they get more than half.

The A value is the average monthly income of all insured persons over the three years before the pension starts, published each year by the Ministry of Health and Welfare. It therefore changes every year regardless of what you paid, and your pension rises as everyone's income rises. The B value is the average of your own declared income, with one extra step. A million won paid twenty years ago is not the same money as a million won today, so every year's figure is converted to present value with a published revaluation rate before the average is taken.

The contribution period is then applied. Longer is not simply more: twenty years is the reference point, below which the payment rate is cut and above which a bonus is added. Below twenty years it starts at 50 percent at ten years and rises 5 percent a year; above twenty years the basic pension itself grows 5 percent for each further year.

2. Why the constant differs by year

The number at the front of the formula is the proportional constant, and it depends on the year you contributed in. It was 2.4 from 1988 to 1998, 1.8 from 1999 to 2007, and from 2008 it began at 1.5 and fell by 0.015 every year. For periods from 2026 onward it is 1.29.

That decline is the history of a falling replacement rate, the share of average income a forty-year contributor receives. It was 70 percent when the scheme began in 1988, 60 percent from 1999 and 50 percent from 2008, then half a percentage point lower each year after that. The 0.015 step in the constant is exactly that half a point.

The 2025 pension reform stopped the decline. Left alone it would have reached 40 percent in 2028; instead it is fixed at 43 percent from 2026, and the matching constant is 1.29. Article 51(1) of the National Pension Act writes that figure as 1,290 thousandths. The freeze does not lift past periods, though, so anyone who contributed continuously from 1988 has a pension built from twenty-odd different constants.

3. The rules inside this app

This app splits the contribution period into months per calendar year. For each year it multiplies that year's constant by the A value plus the average income you typed, then by that year's share of the total months, and adds the results. From 1988 to 1998 a rule weights the income part at 0.75, so that stretch is counted differently. The sum times the over-twenty-years bonus is the basic pension, expressed as a yearly figure.

The payment rate is then applied. Twenty years or more pays the whole basic pension; ten to twenty years pays 50 percent plus 5 percent for each year beyond ten. Drawing early cuts 6 percent a year and gives back 0.5 percent for each leftover month; deferring adds 0.6 percent a month. Neither rate touches the dependants' supplement, which is added afterwards. That is how the statute orders it.

The constants for 2008 through 2025 appear in the Service's published formula with only the ends written out and the middle elided. This app did not invent the middle; it filled it by checking against both ends. Starting at 1.5 in 2008 and subtracting 0.015 a year lands on 1.245 in 2025, exactly the end figure the original gives. No other sequence fits both ends, so there is one answer. The reasoning is written out in the source comment.

Exempted and unpaid months are taken off the end of the period. Only the Service knows which years they fell in, so either choice is a guess, and the later years carry lower constants, which leans the result towards a smaller figure. When a value is unknown, not leaning towards the larger answer seemed the honest choice.

The starting age comes from the year of birth. Article 61 of the Act says 60, but transitional provisions have raised it over time, and anyone born in 1969 or later starts at 65. The first payment falls on the 25th of the month after that age is reached. If the 25th is a Saturday or Sunday the page says the transfer moves earlier, but public holiday data is not loaded, so holiday shifts are not counted.

Nothing you enter goes to a server. The calculation finishes inside the browser, and the server learns only three facts: that the page was opened, that a result appeared once, and that the link was copied. Nothing is saved, so a refresh clears it.

4. Where to find your numbers

The start and end of your contributions are in your record on the Service's app or website. That screen does need identity verification, but unlike the amount it is just two dates, so one visit is enough. If workplace and regional periods are listed separately, add them together. The Service also runs a simulator that needs no verification and accepts year-by-year income and credits; to check a figure from more than one direction, use both side by side.

The average declared income is the mean of what was declared across the whole period. If you do not know it, it is better to run the figure twice, once at your current income and once at an early-career income, and read the result as a range. Knowing the span is more use than forcing a single number.

Declared income has a floor and a ceiling. Income above the ceiling is only declared up to it, so the pension stops growing above that point. That is why a high earner's pension does not rise without limit alongside their income.

5. Choosing between early and deferred

Drawing early cuts 6 percent a year, and the cut lasts for life: five years early leaves 70 percent. Against that, payments run for five more years. On totals alone the two lines usually cross somewhere before eighty. Drawing early is less a question of gain or loss than of whether those five years have other income in them.

Deferring adds 0.6 percent a month, 7.2 percent a year, up to 36 percent over five years. This one needs other income to live on through those years. A separate rule reduces the pension while the recipient is in paid work, so for someone who plans to keep working, deferring can come out ahead. This page does not calculate that reduction.

Drawing early also requires not being in paid work, a condition written into the statute: you cannot work and draw early at the same time. Whether the condition is met is for the Service to decide.

6. Where people get stuck

The figure here can differ from the Service's. The main reason is revaluation: the average income the statute uses converts past income to present value with a different rate for each year, while this page uses one typed value in its place. The longer the contribution history, the wider the gap.

Below ten years of contributions there is no pension, only a lump-sum refund of contributions with interest. Its calculation is nothing like the pension's, so this page does not attempt it.

Every figure here is in this year's terms. Someone drawing in twenty years will receive more in nominal money, by whatever indexation happens in between. Future amounts are not projected here because that would be an assumption, not a calculation.

Pensions are taxed. Pension arising from contributions paid after 2002 is taxable, with a pension income deduction. The figures on this page are before tax.