Retirement not an option for most Vietnamese senior citizens

As the sole breadwinner of a family that can barely afford to make ends meet, Huong has no idea how she would be able to take care of herself after retirement.

The 34-year-old has been working at a curtain factory for five years with a salary of VND7 million ($301) a month, taking care of an elder and a child.

“In the lucky months when we have some extra money, we live a little more comfortably. But the extra is not big enough, so I can’t think about preparing for retirement.”

Dan, janitor at a residential neighborhood in Thu Duc City, works from 6 a.m. till late every day even though he is in his 60s.

His wife works in a school kitchen nearby, and together they make VND13.5 million a month, which is just enough to cover their living costs plus medicines.

Their two children are also manual laborers and cannot help out much.

Huong and Dan are among many Vietnamese citizens likely to grow old without any savings or retirement plan due to low income and lack of access to elderly care.

Vietnam had over 11.4 million people aged 60 or more in 2019, or one elder among every nine people.

The United Nations Population Fund has forecast that by 2030, the country will have one elder in every six people, and it is set to enter the ageing population stage in 2040.

However, only around 27 percent of elders in Vietnam have pensions and stable incomes. The remaining 73 percent are mired in financial difficulties, which means they have to continue working or become dependent on their children.

Around 40 percent of the Vietnamese population in Vietnam have to work until they are 70-74 years old, according to the United Nations.

Seven of 10 elders take up informal jobs like market vendors, taxi drivers or scrap dealers.

Luong Thi My Hanh, head of domestic asset management at investment fund Dragon Capital Vietnam, said most Vietnamese workers do not have a retirement plan and are focused merely on meeting daily needs.

Most of them save for short-term goals and usually spend all the money they have, she added.

Hanh said workers should look to diversify their income and incorporate passive income to ensure post-retirement financial security.

But even those with pension struggle because their income is too low.

In Ho Chi Minh City, Vu Manh Thiet, 70, worked at a garment company for 30 years, but only receives VND591,000 per month as pension.

His wife receives VND3 million a month, and they have to take care of Thiet’s 90-year-old mother.

The low income forces Thiet to work at a student dormitory that pays VND10 million a month, but he is required to stay 23 hours a day at the facility.

Nguyen Duc Loc, head of the SocialLife Research Institute, said that apart from the highly trained workers who can continue to work as consultants in their old age, most workers have to bear a low pension in the last years of their lives.

In HCMC, 45,000 elders are eligible for pension but they receive less than VND3.8 million a month, lower than the city poverty line.

“Most workers do not have savings for their autumn years, and because pension is not enough to meet minimum needs, they are forced to go back to work,” Loc said.

He said there was a gap in elderly care policies in Vietnam, even though the country has been adopting a labor-intensive economic model for the last 30 years.

For Huong, the factory worker in Binh Duong Province, an extra income is a farfetched possibility, as she has already been working long hours, and there is very little chance that she would be able to make ends meet even if she were to get a pension.

Resigned, she said: “I can’t do anything. Just take one day at a time.”

By Tat Dat & Le Tuyet – VnExpress.net – June 25, 2022