"I am afraid of watching news on TV. I bought an apartment with loans after having lived in a rented house for eight years. But housing prices are falling. I cannot even think of buying insurance plans or paying into pension schemes because I have to pay off the loans." 

Lee (37), a mid-level manager to a large company, bought a 26-pyeong apartment in Yangjae-dong, Seoul for 385 million won in February this year, when housing prices were skyrocketing. 

He yelled for joy as recently as July when the price of the house jumped up to 450 million won. But falling housing prices since the announcement of the "8/31 comprehensive property measures" have plagued him. 

Lee takes home 2.5 million won every month after bonuses and taxes. He has to pay 720,000 won in monthly interest on the loan worth 150 million won. 

From next year, it will become 1.1 million won as he has to begin paying back the principal. Only 500,000-800,000 won is available for monthly living expenses after kindergarten fees and childcare expenses for his 2-year-old and 6-year-old sons, and apartment maintenance fees. Saving for his retirement is only a wishful thinking. 

Recent government measures including "8/31 comprehensive property measures," "2005 tax reform," and "elderly care protection law" are likely to bring about fundamental changes to retired life of those in their 30s and 40s. 

After property tax reform, if a 45 year-old company employee owns a 500 million won house, he should pay more than three million won in property tax even when he has no income. As owning houses carries great burden, the effectiveness of owning a house as "investment for retired life" will drop dramatically. 

Beginning in December, Korea will introduce a "pension scheme for retirees." This would lead to the framework for an advanced "three tier pension system" consisting of a "public pension-retiree pension-private pension." The government plans to expand tax credits to pension premiums and benefits. 

Huh Yong-Seok, director for tax policy at the Ministry of Finance and Economy, said, "The government will increase benefits to pension subscribers and beneficiaries in preparation for an aging society." 

"Elderly care protection law" will be introduced in 2008. 

If the law is fully enforced, it will facilitate elderly care services including one in which caregivers visit seniors aged 65 or older who are suffering from dementia or paralysis to nurse or bathe them. It will also increase public subsidies to those who want to go to a nursing home. To finance the measures, health insurance subscribers have to pay more than 1,648 won a month. 

Experts advise that there should be changes to designing retired life in accordance with expected changes in the living environment. 

Mun Hyeong-Pyo, a researcher with the Korea Development Institute, said, "Fundamental changes are taking place because of falling housing prices, increasing pension benefits, and sustained low interest rates. If you don't begin to prepare for your later life, you will find yourself in big trouble after retirement."