More and more Americans are retiring abroad. The Social Security Administration is now paying benefits to more than half a million Americans living outside the United States and the number is steadily rising. One reason is that many Americans have not saved enough money to retire with the lifestyle that they want—in the United States—once they are on Social Security.
If you have traveled to Vietnam in recent years and found it an appealing place, you might want to consider moving there when you retire. Actually, even those who have never been there might think about choosing it for a new home. Vietnam is famous for its beautiful beaches and, surprisingly enough, for its friendliness to Americans.
- More and more Americans are retiring abroad because they cannot live their dream lifestyle in the U.S. once Social Security kicks in.
- If you are familiar with Vietnam and like it there, the country is viable location for retirement.
- One advantage of living in Vietnam, for American retirees, is that many of the residents speak English.
- Americans are likely meet many other expats, as many Vietnamese that moved to the United States after the Vietnam War have since returned to Vietnam.
- Expect to find high-caliber cuisine—French food to the north and American in the south of Vietnam.
As Seymour Hersh once said to The New Yorker,
“Diplomatically, the U.S. is considered a friend, a potential ally against China. Thousands of Vietnamese who worked for or with the Americans during the Vietnam War fled to the United States in 1975. Some of their children have confounded their parents by returning to communist Vietnam, despite its many ills."
So they, too, are Americans and expats. You’ll have company.
Costs to Live in Vietnam
Each year, International Living’s Global Retirement Index ranks retirement destinations around the world, measuring factors such as climate, health care, benefits, discounts, and cost of living. Vietnam scored 99 in its 2019 ranking. Only Cambodia was cheaper.
A previous International Living ranking showed that most expats could live comfortably in Vietnam for about $800 to $1,200 a month. Some basic math shows that if you live on $800 per month—probably the lowest amount for which most retirees could live comfortably—your $200,000 savings account will last about 21 years ($200,000 ÷ $800 = 250 months, or 20.8 years); live on $1,200 a month (probably a safer estimate) and your savings would last 14 years ($200,000 ÷ $1,200 = 166.66 months, or 13.9 years).
Of course, this basic example assumes that your monthly expenses stay exactly the same over the years, that your retirement savings are not growing through investment, and that you have no other income or expenses (tax liabilities) during retirement.
The example also omits Social Security, which most Americans receive, for an average of about $1,503 a month—and just over $3,000 for a couple. That, of course, will make all the difference in giving you flexibility in your retirement. You will have the money to make trips home occasionally, for example, or to weather any inflation that might affect the cost of living throughout your retirement years. Having your income based on the dollar also makes a big difference in foreign lands.
Where You Can Live
According to Expat Arrivals, modern apartments are being built in increasing numbers in Vietnam. These complexes usually include laundry facilities, gyms, and swimming pools. Rent for such a one-bedroom apartment might be 9 to 13 million Vietnamese dong (VND) per month in Ho Chi Minh City (formerly Saigon), but such places are also available to buy as condominiums.
Real estate deals are better negotiated onsite and the website Expatlife recommends using just one agent in the housing search because,
“as most of them use the same database of available accommodation, you would probably end up viewing the same places, again and again, wasting both time and money. Only consider changing agents if you're not being shown the types of property you want.”
As for other expenses, prices vary all over the country, just as housing does. The cost of living will be higher in big cities, especially in the centers of those cities, and lower as you move outside the center of the city. On average, though, inner-city bus fare is 6,000 VNDs for a single journey and a taxi in Ho Chi Minh City is VND 14,000 per kilometer.
As one comparative web site called numbeo puts it, consumer prices, including rent, are 47.11% lower in Vietnam than in the United States, grocery prices are 45.42% lower, and restaurant prices (especially important if one of you—or both—says he or she is sick of cooking) are a whopping 72.21% less, although one example they cite, a meal for two in an inexpensive restaurant is, at the equivalent of $1.85, a significant 85.66% lower! And the food in Vietnam is high quality, according to many who have been there—tending toward the French in the north (Hanoi) and American in the south (Ho Chi Minh City).
While many older Vietnamese will speak more French than English, the trend has shifted because English is now a mandatory course in primary schools. Learning the language of a new country is usually a difficult part of adjusting to a new culture. But here is where Americans are in luck: “The more technology and globalization has progressed and diffused, the more English plays an important role in the world,” according to Erika Sakaguchi, a Japanese university degree candidate. And the Vietnamese very much want to do business with Americans. As a result, many already speak English.
The Bottom Line
The uncertainty of anyone's lifespan makes it impossible to predict if $200,000 alone (in addition to Social Security) is enough to last through retirement anywhere—even in a country with a low cost of living such as Vietnam. But there is absolutely no doubt that living abroad during retirement can offer some U.S. citizens a better quality of life for their money. You can stretch your retirement dollars much further.
The number of people receiving U.S. Social Security checks in foreign countries in 2020.
As with any retirement destination abroad, visit the area more than once before making any final decisions—and try to see the country from a resident’s perspective, rather than as a tourist (in this case, maybe one long, investigative visit would do it). Seek out expats when you are there; they’ll have discovered a lot that might coincide with your own perspective, and they will probably be happy to share that information.
Lastly, taxes for those retiring abroad can be quite complicated. As such, it is always recommended that you work with a qualified attorney on any estate planning matters and a tax specialist to determine how moving to Vietnam will affect your tax obligations in the United States.