Extending the legal retirement age from the current 60 to 65 could result in additional labor costs of over 30 trillion won ($21.39 billion) per year for local businesses, according to a report released Monday by a lobby group of local entrepreneurs.

The Federation of Korean Industries' report estimated that in the first year of the new retirement age, companies across South Korea would have an additional 58,214 workers aged 60 to 64 on their payroll.

This number of employees, who, under the existing system, would have to retire at 60 – is projected to continue to increase, reaching 590,433 by the fifth year of implementation.

The extra labor costs from extending the retirement age are estimated at around 3.1 trillion won in the first year, with the approximately 58,200 workers over 60 retained. By the fifth year, costs are expected to rise to 30.2 trillion won annually.

The report, commissioned to Pusan National University economics professor Kim Hyun-suk, deducted the number of senior employees who are currently working past the retirement age under new contracts. South Korea's official retirement age is 60, but it is possible for older workers to sign short-term employment contracts with their employers.

"The need for older workers varies for each company, depending on what field it is in and the employment situation for each corporation. Thus, it would be ideal to leave the matter of the retirement age to each company," Kim argued in the report.

With the consistent increase in life expectancy coupled with society's rapid ageing, South Korea has been mulling extending the legal retirement age to 65.

The country's current retirement age of 60 was extended to all workplaces in January 2017, but many called for it to be higher. An average Korean woman is expected to live 90.7 years and men 86.3, according to a January report by the Korea Insurance Development Institute.

Both the ruling People Power Party and the opposition parties agree on the idea, but they differ on the specifics. The ruling party is planning to propose a related bill next year that is based on a more gradual approach -- such as initially extending it to 63 -- while lawmakers of the main opposition Democratic Party of Korea have already proposed bills to extend it to 65.

However, the business sector has voiced concerns over the costs of extending the retirement age.

The FKI said the projected cost of 30.2 trillion won to keep workers aged 60-64 employed could theoretically be used to hire up to 902,000 younger workers.

Han Dong-hoon, chair of the conservative People Power Party, said last week that there are concerns that extending the retirement age for public companies and large corporations could led to less opportunities for the younger generation, which he said was "very on point."

According to him though, extending the retirement age does not necessarily mean senior employees would receive the same level of benefits as before and that there are "many other options,” mentioning the example of an older worker agreeing to work for a starting-level salary.