How Much Would You Require To Retire In Vietnam?

Ive pontificated and procrastonated over this issue for a long time as some here are probably aware,but i feel i may be soon ready to make a decission....My question here though is thus:I was told that you can get up to 10%interest in some Vnam bank accounts is this correct?And secondly does anyone think 100k($190000)would be a possibile amount to retire on.Thanking you in advance ;)This includes building a small house which im hoping i can do for around 30k.I also realize my existance would be simple i would,nt be living like a king!!

This post has been edited by totlanh: 10 January 2007 - 07:16 PM

totlanh, on Jan 10 2007, 06:05 PM, said:

I do not really know about Vietnam on that matter but in the past, in Thailand, when such kind of interest rate was quite common, it was not for foreigners, only for Thais.
Foreigners were getting 0%.
And do not forget that interest rate is related to inflation, banks are very seldom, if ever overly generous...

Thanks Bluecat,i think though in an effort to negate this i would put the money in under my wifes name(she is Vietnamese)

Well, can't comment on that.
Will just repeat what quite a few people said, do not put up more money in this region than you can afford to lose...
I'm sure it will change pretty fast but we are not there yet.

Bluecat, on Jan 11 2007, 12:04 AM, said:

I earn interest on my Siam Commercial Bank Savings Account in Thailand. I don't know the rate but it certainly isn't anywhere near 10%.
It is just a passbook account with an ATM card, but it is only in my name and not the wife's.

I'd look to recent developments in Thailand as an example of what can happen when investing in Southeast Asian countries (i.e. the laws may suddenly change, and your savings are suddenly made worthless). If there's no requirement to keep your money in Vietnam for visa purposes, why not bank in the US, where at the moment you can get 5% on cash-like products such as CD's and online savings accounts (at HSBC and ING Direct, among others). You can access your money easily by ATM or move larger amounts over by wire transfer to a local checking account periodically.

The retirement question is interesting. I guess it depends on factors such as how old you are now, what a reasonable life expectancy would be and what you estimate your expenses to be going forward. I'd look pretty seriously at the health-care implications of living in a country like Vietnam as you age, both from the point of view of access to medical services and from the insurance point of view. In Europe, for example, there's a pretty decent social safety net in terms of nationalized health care in most countries, but out in Vietnam I reckon you'd be on your own.

Just my $0.02

Mandrake's beer tokens are spread over three countries in four separate banks... Under Mandrake control.

totlanh, on Jan 10 2007, 08:05 PM, said:

I am dreaming everyday of retirement in Thailand with trips to Vietnam, Cambodia, Philippines....
however still I prefer to work in Japan, I am now 55 years old, I have my accomodation in Thailand, also savings...

However:
1-
I do not know how old you are, but you are 2 persons, still no own accomodation yet.
I do not think, that USD 190.000,- is enough, if you do not expect a retirement allowance starting with 60 or 65 years old.
If this is the case, MAYBE enough, but not sure, as you do not know your own future...medical fees for example are always a risk, interests might change considerable over these years...

2-
Never bring more money into that region as necessary - BUY your own accomodation = yes, some deposit for visa + security = YES, otherwise keep your money in USA or in EU (or in my case in Japan, too).

3-
Thai banking interests are now totally down, not really zero, but about 1 percent or so...

4-
In your case, as the wife is Vietnam related, it is best to go there just as a tourist and for visits and check all out carefully, secure your own home, prepare for the future retirement...but go back to US or EU and continue to earn some more money...

I think, you are not ready yet to move out for retirement, something might go wrong.
It is not funny to be in this area without any money.
To go home after a good time of 'temporary retirement' must be a horrible feeling... some people even jump from their windows and balconies in Pattaya.

Thanks all for you answers.The main thing i hav,nt devulged is my age!!Im still only 36 so ive hopefully plenty of time yet!!I suppose retiring is a bit much given my age but im one of those people who work to live not live to work if you get my drift!!I s,pose id be better investing my 100k in some business venture though,any ideas??!!!

There is no way a Vietnamese bank will pay you 10%, at least not if it is legit. Last went to Vietcombank a few days ago, there fixed deposit interest was somewhere around 4%.

Must say i thought the figure was ludicrously high as well,i was told this by an english friend of mine who runs a bar in Hoi an.I think he might have been refering to the post office actually(?)

yohan, on Jan 11 2007, 01:12 PM, said:

I have to agree with Yohan. $190,000 is no where near enough to retire on at your age.

I have come back to Oz after 2 years of "temporary retirement". Not because my money was running out but because I was becoming bored (and was offerrred a very lucritive contract to come back to work).

I love to visit Thailand, but I'm 10 years older than you and aren't ready to spend all day every day veging out. Mind you, for 2 years it was great to catch up on all the things that I wanted to. I read probably 20 novels that I had been wanting to read but had never found the time.

Not knowing about the exact cost of living in Vietnam, but judging by Thailand, I would say that $500,000 would be the absolute minimum to contemplate a long term, no going back, retirement fund. But even then , you would be required to live quite frugally.

TizMe, on Jan 11 2007, 09:18 PM, said:

US$ 190,000 is not enough to retire at any age if you do not have a supplementary income, I think...

I recon its enough if you are 105....

And you all know the cost of living in Vnam do you?

I know what it is today, I sure do not know what it will be in 5/10/15/20 years from now and I'm sure pretty optimistic on that, for the Vietnamese people, not for people wanting to retire there.

TizMe, on Jan 12 2007, 12:18 AM, said:

totlanh, on Jan 12 2007, 01:01 AM, said:

IF you could get that 10% interest on your $190,000 AND you could guarantee that you could do so for the next 60 years, then you could stand a chance of making it. But those are 2 very big IFs.

It's not difficult to get returns of around 5% at the moment in the US. If you were simply to invest your $190,000 and live on the interest, that would mean you'd have about $10,000 to live on. I guess that's a lot in some developing countries - I haven't been to Vietnam, but I know that in Indonesia you'd be reasonably comfortable with that income.

A couple of questions occur to me: $10,000 may be a lot for a local person, but will it be enough for you? Even if your tastes are modest, you'll constantly have to deal with people's expectations that you are a rich Westerner. So unless you send your wife to buy everything, you'll be stuck with the 'foreigner' price time and time again. Also, what if you decide to have kids? Particularly if you want them to go to an international school, you'll need more than a household income of $10,000 p/a to raise them.

I agree with some of the posters above that the time frame is too long to make predictions. You could easily live to be 80, so you need to think about providing for at least the next 44 years. In that time, inflation could destroy the value of your investments and currency exchange rates could move against you.

Also, do you really want to be permanently retired at 36? Why not use the position of leisure if you make this move to run an online business or do something interesting?

totlanh, on Jan 11 2007, 10:01 PM, said:

Living off the interest would effectively halve your wealth every 10 years or so (rough guess but you get the point). If it's tight for you now, you'll be in trouble very soon. What a Dollar will buy you now, you'll be paying 2 Dollars for later. Live off the interest and there goes the balance. This rule applies in America, UK, Vietnam, Thailand, China, Columbia, Norway, Iceland...

totlanh, on Jan 12 2007, 12:01 AM, said:

Let me explain something about 'living costs'
and let me compare 2 countries, which I know very well.

Japan - Thailand

1-
Comparing the income per person in USD, the living costs should be 16 : 1, because in Thailand 1 person in average is earning USD 2000,- and in Japan 1 person is earning USD 32.000,- per year.

Some people are therefore thinking, all Thais are very very poor - of couse they never have been in Thailand before.

2-
Comparing however the Purchasing Power of the World Bank Index, which is considering pricing differences and important differences of the way, local people are living, the difference is down to 4 : 1 -
In Thailand costs like heating do not exist, and winter clothings are not required, and rent comparing local Thai : local Japanese in the province and in the city is much lower and so on...

3-
My wife and me as foreigners (Europe and Japanese) do not eat, what Thai people are eating - and I am not allowed to buy an accomodation, what Thai people will usually buy, like a house in a compound - we have no basic health insurance - -we have to pay visa and re-entry fees, double pricing -
For sure, living in Thailand for a foreigner is more expensive than for a local Thai.

Our impression is that Thailand is about 2 to 3 times cheaper than Japan for a JAPANESE citizen, if he compares his expenses in Japan and in Thailand after his retirement, without changing much of his daily living standard.

----------------------------

Same is it about in Philippines, I know Cebu area very well. The income difference in USD is about 30:1 between Philippines and Japan, however I noticed, Philippines is even slightly more expensive than Thailand or is offering lower quality for the same money.

About Vietnam, it will be about the same, as we have to calculate the difference between the income per person, the income considering purchasing power and the difference if the consumer is a local or a foreigner.

Just my calculation, not based on science, but on my feelings...
Considering you might be on this earth with your wife for 40 years more, you will have a secure income of USD 166,- per month/person after buying your accomodation deducted from USD 190.000.-.
I do not consider interests as a reliable source for long-term income.

I think however, it should be at least USD 428,- per person per month as a couple to consider retirement in your case. This means you should have at least USD 570.000,- - and this is 3 times more than you have now.

Conclusion:
Whatever you do, whatever is your way of making a living in Vietnam, or Thailand, or Philippines...
your present savings are NOT enough.

This post has been edited by yohan: 12 January 2007 - 02:45 PM