Elderly residents sat under the eaves, sipping tea. But the price caught me off guard: A single room costs VND16 million (US$608) a month plus certain fees.
For most Vietnamese retirees, that is far beyond reach.
In just over two decades the country will move from a “golden population structure” to an “aged society.”
France took 115 years to make that shift. Australia took 73.
By 2038 one in five Vietnamese will be over 60, or more than 21 million people. The social security system is not ready.
When people talk about aging, they often focus on costs. Who will pay pensions? Who will cover healthcare? Can the budget handle it? Those are all valid questions, but they also frame older people as a burden.
Let’s look at it another way. Twenty-one million older adults also means 21 million potential customers. They need healthcare, proper nutrition, places to exercise, and social connections. They need financial products, suitable housing, and travel services.
The ecosystem serving this group, known globally as the “silver economy,” has reached trillions of dollars’ worth. It drives growth in Europe, Japan and South Korea.
In Vietnam, with a population of more than 100 million and a fast-growing middle class, demand for quality services in old age will surge over the next 10-15 years.
People at a nursing home for the elderly in Hanoi, September 2025. Photo by VnExpress/Phan Duong
A 2021 study by Vietnam Chamber of Commerce and Industry and UNFPA found that older people want more than healthcare. They want sports, friendships, proper diets, opportunities to keep working, and support for daily living. The biggest gap lies in basic services. Of every 10 people who want companionship, only two find suitable options.
Demand is not the problem. Policy has not done enough to let supply catch up. Bottlenecks are holding back the silver economy.
Social insurance coverage remains limited. Only 37-40% of older people receive pensions or social allowances, and just 12-13% receive contributory pensions.
That leaves more than 10 million elderly people without stable income. More than half of the current workforce works in the informal sector and does not join social insurance. Without timely support, this group will put heavy pressure on the system in old age.
Health insurance coverage exceeds 94%, but benefits fall short of elderly needs.
Essential services such as rehabilitation, home care and palliative care are not covered. As a result, out-of-pocket spending accounts for 41-42% of total healthcare costs, pushing many families into financial distress.
Supplementary pension funds and tax incentives remain weak. This issue receives little public attention, but it matters. A well-designed supplementary pension system can act as a safety net for workers and a source of long-term capital for the economy.
In practice the 2024 Social Insurance Law allows workers to join supplementary pension funds only through employers. Individuals cannot join on their own. Retirees, self-employed people and freelancers who have paid taxes and social insurance cannot use this channel to save more for old age.
The rule narrows participation and limits the spread of tax benefits to those who already meet their obligations.
The personal income tax deduction is capped at VND1 million a month. Authorities set that level in 2013 and have not adjusted it for 13 years, despite inflation and higher incomes.
When employers contribute to these funds, workers still pay income tax at the time of contribution. These contributions often come with conditions that require employees to work a set number of years before they can claim benefits.
If they leave early, they lose those benefits and must go through a complex process to claim tax refunds. Most workers see little incentive to join.
Investment rules also create problems.
Current regulations require pension funds to invest at least 50% in government bonds, though a draft revision lowers that to 30 to 40%. That may sound safe, but government bond yields hover at around 3% while inflation stands at about 3.5%.
Over time, that erodes real returns. Younger and middle-aged workers compare this with gold, stocks or even crypto and see no reason to participate. In many countries, pension funds are not forced into fixed asset classes. They adjust portfolios based on age and risk tolerance.
Another bottleneck lies in the lack of standards and incentives for businesses.
Vietnam does not have a unified national standard for elderly care services. Without standards, authorities cannot license, monitor or rate providers. The market grows on its own, and serious investors hesitate because they lack a transparent playing field.
Besides, there are no dedicated policies on land, tax or credit for this industry. Nursing homes and care centers fall under the same category as schools and kindergartens, without specific incentives.
International experience shows that no country has solved aging by relying on a single source, whether the state or market or families.
Japan launched long-term care insurance in 2000, Germany in 1995 and South Korea in 2008. Nordic countries combine public budgets with competitive bidding, allowing private firms to deliver services under state standards. Singapore built a mandatory retirement savings system early on and linked it to home ownership.
The common feature is a multi-layered system that blends the roles of government, business and community.
For Vietnam, several steps stand out.
At the strategic level, the government should launch a national program to adapt to population aging, with the silver economy defined as a new growth sector.
For supplementary pensions, policymakers should expand access. Anyone who participates in mandatory social insurance should be able to join as an individual, not only through employers.
The tax deduction cap should rise and link to the base salary index to keep pace with inflation.
Employer contributions should be exempt from personal income tax at the time of payment, as they represent long-term benefits rather than current income.
Investment rules should also allow age-based portfolios, where younger participants can seek higher returns and older participants shift to safer assets. Only then can supplementary pensions serve both roles of social protection and long-term capital formation.
For care services, issuing national standards will create a foundation for licensing, supervision and quality ratings.
A long-term care fund with shared contributions can ensure financial sustainability.
Public-private partnerships in elderly care, community healthcare and age-friendly housing should receive support, along with tax, credit and land incentives.
At the same time training for elderly care workers should enter the formal education system since the lack of skilled labor remains the biggest constraint.
Population aging is inevitable. How we see it, whether as a burden or as a resource, will shape the outcome. The silver economy is not a distant idea. It stands at the door, with 14 to 16 million older people today and 21 million in little more than a decade.
The question is not whether to open that door, but whether we will open it in time.
*Dau Anh Tuan works at the Vietnam Chamber of Commerce and Industry.