What should employees who have paid social insurance for 35 years but are not yet of retirement age do?

Ms. Vu Thi Xuyen (49 years old) has been working as a garment worker in Ho Chi Minh City since she was 20 years old and has paid social insurance for nearly 30 years.

She shared that as a worker, she constantly has to work overtime, so she is very tired and cannot keep up with young workers. Therefore, she plans to try to work a few more years and then quit her job to wait for her pension, or if possible, she will apply for early retirement.

“If I continue working for another 5 years, I will be 54 years old and have 35 years of social insurance contributions, 5 years more than the social insurance contribution regulations to receive the maximum pension (75%). However, because the retirement age is gradually increasing, I do not know what to do,” Ms. Xuyen wondered.

According to Decree 135/2020 of the Government, from January 1, 2021, the retirement age and pension age of employees working in normal working conditions will be adjusted according to the roadmap of increasing by 3 months each year until reaching 62 years old for male employees, and increasing by 4 months until reaching 60 years old for female employees. The roadmap for increasing the retirement age applies until reaching 62 years old for male employees in 2028, and 60 years old for female employees in 2035.

Thus, to be eligible for pension, employees must have 20 years of social insurance contributions and reach retirement age according to regulations.

But with the above social insurance payment period, the employee's monthly pension is only calculated at 45% of the average monthly salary for social insurance payment.

However, if they continue to participate in social insurance, for each additional year, the employee will be calculated an additional 2%; the maximum level is 75%. And the number of years to receive a maximum pension of 75%, male employees must pay 35 years of social insurance, and female employees must pay 30 years. If they retire before the prescribed age, their pension will be reduced by 2% each year.

Retire early or save to get the maximum benefit

According to current regulations, in case an employee has enough years of social insurance participation to receive a pension (20 years) or has 30 or 35 years of social insurance contributions but is not yet of retirement age, the employee can choose 1 of 2 options.

Option 1: reserve the social insurance payment period until retirement age. The reserve does not affect the pension benefit nor does it reduce the pension percentage of the employee.

Employees who have paid social insurance for 30 or 35 years will receive the maximum pension if they reserve their payment period and wait until the prescribed retirement age.

Option 2: Early retirement in case of meeting the prescribed conditions. In this case, the employee will have 2% of his/her pension deducted each year he/she retires early. There will be no deduction for early retirement of less than 6 months, and from 6 months to less than 12 months, 1% of his/her pension will be deducted.

Employees can choose to reserve or retire early when they have paid social insurance but are not yet old enough to retire.

A representative of Vietnam Social Security said that retirees who have paid social insurance for more years than the maximum pension will receive a one-time subsidy.

Specifically, according to Article 68 of the Social Insurance Law 2024 (effective from July 1, 2025), male workers with a social insurance payment period of more than 35 years and female workers with a payment period of more than 30 years will receive a one-time allowance in addition to their pension when they retire.

The one-time benefit level for each year of payment higher than the above-mentioned period is equal to 0.5 times the average salary used as the basis for social insurance payment for each year of payment higher than the retirement age.

In case the employee is eligible for pension but continues to pay social insurance, the subsidy is equal to 2 times the average salary used as the basis for social insurance payment for each year of payment higher than the maximum number of years of payment (75%), from the time after reaching retirement age as prescribed by law until the time of retirement.