South Korea stands among the biggest winners of the artificial intelligence boom. The country is home to Samsung Electronics and SK Hynix, the world's two largest manufacturers of memory chips, whose high-bandwidth memory (HBM) chips are a critical component of the AI data-center buildout. Chip workers are receiving bonuses of around $400,000, and the KOSPI, Korea's benchmark stock index, has risen nearly 60% so far this year.

Yet a report from Goldman Sachs suggests that much of this wealth may never reach ordinary households.

Even as demand for chips has driven Korean exports and factory investment sharply higher, retail sales remain close to their 2019 levels. Goldman describes the situation as a "K-shaped cycle," in which corporate balance sheets thrive while private consumption stays soft.

Goldman's economists offer an explanation: South Korea is getting too old, too quickly.

The East Asian nation has one of the world's lowest fertility rates, reporting 0.8 births per woman last year—far below the 2.1 rate needed to keep population levels relatively stable. By comparison, the United States reported 1.6 births per woman. Twenty percent of Korea's population is now over the age of 65.

Korea's postwar baby boomers are retiring just as the fertility rate remains below replacement level, leaving a shrinking pool of working-age Koreans to support the elderly.

The United Nations projects that Korea's "dependency ratio"—the number of children and elderly people relative to the working-age population—will rise by 1.5 percentage points a year over the next decade. That is the fastest pace among the 70 large and midsized economies Goldman analyzed, exceeding even Japan during its most intense period of aging, from 2000 to 2015. Japan's experience during those years is widely studied by economists as a case of how rapid demographic change can weigh on domestic demand, making Korea's faster pace a point of comparison among analysts.

Korea's retirement problem

Compounding the challenge, older Koreans behave unusually in retirement: they don't spend.

In Japan, Taiwan, and the United States, people tend to draw down their savings after retiring, but Koreans do not. Goldman found that Koreans in their sixties save more than any other age group, retaining 37% of their income. Even those in their seventies save at rates similar to people in their forties.

The wealth that elderly Koreans do hold is difficult to spend.

More than 60% of Korean household net worth is tied up in non-financial assets such as real estate, the highest share among the advanced economies Goldman studied. Financial assets held by Korean households are worth only 100% of the country's 2024 GDP, the lowest level in Goldman's sample.

The result is a retiree population that is asset-rich but cash poor. "Even among elderly households that have accumulated retirement savings, fewer than one-fourth could cover consumption needs with financial assets," Goldman researchers wrote. When incomes decline, Koreans are more likely to cut spending or work more than to liquidate their assets.

Koreans are also wary of methods to convert housing wealth into cash. Reverse mortgages cover just 1.8% of homeowners older than 75, which Goldman said partly reflects a strong desire among retirees to leave assets to their heirs.

By contrast, Goldman found that Taiwan—another AI boom winner, home to chipmaker TSMC—has stronger consumption among older consumers despite facing equally severe aging pressures. (The island's government projects its population could halve in size by 2075.) Taiwanese households have a much larger financial cushion than their Korean counterparts, with net financial assets totaling five times GDP, compared with just one times GDP in Korea.

Why too much saving could hurt Korea's economy

As more Koreans age, that propensity to save could become a drag on spending.

Among the major economies Goldman studied, a one percentage point increase in the dependency ratio reduces real private consumption growth by roughly 3 basis points a year. In Korea, however, the hit to growth is between 10 and 17 basis points.

One of Goldman's models suggests that Korea's fast-aging population could shave as much as 25 basis points from annual consumption growth over the next decade.

According to Goldman's long-term modeling, even if Korea maintains 2% economic growth over the next two decades, consumption growth would gradually weaken and eventually turn negative.

Korean officials have tried a variety of national- and local-level measures to reverse falling birth rates. The national government announced a "marriage support grant" of up to 1 million won ($725) for couples who marry, plus an additional 20 million won ($14,500) per newborn. Local governments are also hosting matchmaking events for Korean singles, in some cases offering monetary rewards to couples who marry after meeting at an event.

Birth rates are rising very slightly, but even a sharp increase in fertility would not solve Korea's problem in the near term, as children born now will not reach working age for at least two decades. Instead, Goldman's economists suggest that Seoul pursue more immediate solutions, such as helping elderly Koreans unlock their housing wealth and better distributing the windfall generated by the country's highly profitable technology firms.

This story was originally featured on Fortune.com.