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Changing the way Vietnamese people prepare for retirement

Ho Chi Minh CityThe results of several surveys show that if elected, the majority of Vietnamese people want to retire at the age of 50 years, very few people wait until they are old enough.

Since the beginning of this year, Mr. and Mrs. Nguyen Van Huynh, 50 years old (District 12, Ho Chi Minh City) decided to stop working and retire early.

Their daily rhythm is to get up at 5 am, go to the garden to water the plants and feed the birds. After the children go to school, this husband and wife couple invites each other to go shopping or have coffee with friends. The happiest time is after 5 pm, the whole family goes to the rooftop garden to exercise and collect fruits. “At 9 p.m., no one in my house was awake,” Huynh said.

“Now it’s time to wake up and sleep whenever you like, work as you please,” said the old man from Ha Tay.

One of the hobbies Huynh is preparing for retirement is gardening, having created a 300 square meter rooftop garden, which simulates villages in the old countryside.  Photo: Characters provided

One of the hobbies Huynh is preparing for retirement is gardening, having created a 300 square meter rooftop garden, which simulates villages in the old countryside. Photo: Characters provided

To have such certainty, Huynh has divided her life into stages and is working hard to achieve her goals. According to him, the age of 20 to 40 is a period of study, labor, investment and accumulation; entering the age of 40-50 years, reducing investment, risky labor, increasing investment and basic accumulation; Until the age of 50, they have to settle down, rest and from 60 years, they will not invest, do business or do anything for money anymore.

Currently, Mr. Huynh still mostly does investment or brokerage work on condition that she doesn’t have to work under money pressure, this source of income is only for traveling and serving hobbies. The rest, he has a stable source of living and the cost of studying for his family from investments such as renting a house, shares in companies … “The income in early retirement is enough to cover expenses. The average monthly expenses of my family,” he said.

Huynh and his wife are among more than 28% Vietnamese have planned to achieve the life they want in old age, according to a survey conducted by the Institute of Labor and Social Sciences conducted in late 2021. Of the more than 2,000 respondents, 41% plan to retire in old age. 55 and nearly 39% will retire from 55 to under the legal age. More than half of the city’s residents plan to retire between the ages of 45 and 55.

One survey on VnExpress with more than 4,300 readers indicating that only 9% decide when it’s time to retire. The remaining 7% want to retire under the age of 40, 32% want to retire between 40-50 and 52% want to retire from 50 to below the statutory retirement age. This shows that most Vietnamese people have desires early retirement of the prescribed age, some people even start doing it earlier.

According to a survey conducted by a VnExpress reporter, the majority of people who have implemented early retirement plans are young people who are successful in business, IT, real estate, securities or virtual currency… Whether intentionally or not Unwittingly, they all follow trends FIRE (financial freedom and early retirement) that has emerged in the world over the last few years.

Hung Nguyen, 30 years old from Ninh Binh, is expected to reach the financial freedom milestone in the next 5 years, when he has accumulated enough USD one million. He bought a house in Hanoi and has assets of about 8 billion VND.

After graduating from school, this Law scholar worked in a proper field of study, but after a while, he was unable to see the future. From the age of 25, he turned to a real estate broker. After a bit of accumulation, he invested in stocks, forex and virtual currencies. In the past year, he mainly invested in cryptocurrencies, with an average monthly profit of 70-100 million dong. Flexible work allows Hung to take the initiative in time, exercise, rest and additional knowledge. “In fact, for the past four years, I have lived like a pensioner,” Hung said.

The reason he wanted to retire early was because he didn’t like a busy life. “It doesn’t matter where I live, as long as it’s a life close to nature and fully invested in myself,” he added.

The desire to retire early is increasingly visible in the midst of the turmoil due to Covid-19, but not everyone is able to make it happen. Vietnam currently has 12.6 million people over the age of 60, of which more than 4.3 million need care support, more than 70% of whom still have to work to earn a living.

Associate Professor Giang Thanh Long, Director of Public Policy and Management, National Economic University, said that people in some countries, such as Japan, during the golden population period, the savings rate rose to 53%, which was reinvested in the economy to generate future income . In contrast, Vietnam’s savings rate in the gold population is currently only about 28%.

However, a good sign is that young people are becoming increasingly aware of the problem of saving. According to an insurance company leader, previously the majority of customers participating in insurance were in the age group above 45 years. Currently, around 25% are between 30 and 44 years old.

Hong Tham and his wife, 28 years old, from Nghe An, who currently work in the financial advisory field are an example. In contrast to young Vietnamese who want to travel or buy a house, they prioritize building a pension fund. His family stayed home to rent 5 million dong per month, but more than three years ago had spent that much money on four insurance policies to ensure pensions for parents and children’s education. The total income of the family over the years has increased from 25 to more than 40 million dong per month, which means that the number of pensions has also increased.

“We divide our income into 50% essential expenses, 20% pension, education, financial protection, 5% personal development, financial freedom, 15% short-term savings, and 10% enjoy and charity”, Hong Tham revealed.

Hong Tham and her husband.  Photo: Characters provided

Hong Tham and her husband. Photo: Characters provided

Another change in Vietnam’s retirement concept is that people are gradually getting rid of the “older kids” mindset. According to Associate Professor of Sociology Trinh Van Tung (University of Social Sciences and Humanities, VNU), this thinking is associated with a pure agricultural society. When there is no labor force, Vietnamese often do not have a stable income. However, in modern society, more and more people are actively piling up to avoid dependence on heredity. In fact, many elderly people have savings to support their children. “The most obvious change is the desire to be independent, not dependent on the next generation,” said this expert.

Huynh and his wife also did not decide not to build a “child-centred” elderly life. The reasons why he chose to retire early include reducing his workload, maintaining his health, and partly wanting to prepare for his “old retirement” so that it won’t be too surprising. “Building a retirement plan what matters is not how much money you have, but the principle of knowing enough. Even if you are economically prepared and in good health, you will never live too much for your children or be ready to care for your grandchildren. enough,” he said.

When he discontinued the business stuff that was doing well, many people wondered why not wait for the kids to grow up and then give it up. He explained that I couldn’t work hard for another 10 or 20 years, wait for my son to grow up, and then accept the results.

“Neither am I forcing my children to give up their own lives to succeed. The best way is to stop and expend energy on taking care of their own lives,” says Huynh.

Phan Duong

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