Economic hardship forces one in four retirees in Turkey to remain in the workforce

This photograph taken on October 21, 2022, shows pedestrians walking on the crowded Istiklal street in Istanbul. (Photo by Yasin AKGUL / AFP)

Nearly one in four retirees in Turkey remains in the workforce due to economic difficulties, with their number more than doubling since 2017, the Bianet news website reported.

The Turkey Retirees Association (TUED) reports that close to 4 million retirees are still working to make ends meet, representing about 25 percent of all retirees in the country. Istanbul alone accounts for about 500,000 of these individuals.

While March 2024 data from the Social Security Institution (SGK) indicate that around 1.94 million of these retirees are working in the formal sector, the rest are employed informally.

Turkey’s economic landscape has deteriorated significantly since 2018, marked by currency depreciation, high inflation and increasing unemployment rates. These factors have collectively eroded the purchasing power of the Turkish lira, making it difficult for retirees and working-class citizens to maintain their standard of living.

The economic instability in Turkey has been further compounded by Turkish President Recep Tayyip Erdoğan’s unusual interventions in the country’s monetary policy.

Contrary to conventional wisdom, Erdoğan in the past pressured the Central Bank of Turkey to lower interest rates amid high inflation. These actions led to sharp criticism from economists and financial analysts globally since lower interest rates during periods of inflation typically weaken the national currency further. This policy direction accelerated the lira’s depreciation, contributing to the country’s ongoing economic challenges.

The country also has a sizable informal sector, with many people working jobs unofficially.

This significant workforce segment reflects the broader challenges faced by the over 16 million individuals receiving retirement and old-age pensions from the SGK. Kazım Ergün, chair of TUED, highlighted the economic strain forcing many retirees back into employment. “Increasing pension amounts could help these retirees fully retire, potentially freeing up jobs for younger workers,” Ergün said.

Turkey’s retiree population has reached 15.85 million, marking an increase of approximately 1.25 million since 2021, as economic pressures necessitate continued employment among the elderly, according to data from TUED.

The composition of retirees shows 10.52 million receive their pensions from the SSK, 2.85 million from BAĞ-KUR (Self-Employed Insurance) and 2.48 million from the Retirement Fund for Civil Servants. As of July 2024, the average pension will stand at TL 11,566 ($351), ranging from a minimum of TL 5,500 ($166) to a maximum of TL 38,400 ($1,165).

Retirement ages are set at 65 for men and 60 for women, although conditions exist that allow retirement as early as 58. The demographic profile of retirees shows an average age of 68.5 years, with women constituting 58 percent of the retiree population and men 42 percent.

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