PAYING THE PRICE: The Hungarians abandoning retirement

Surging inflation in Hungary is forcing more retirees to re-enter the job market than ever before.

For some, their pensions can no longer meet their daily expenses, while for others, returning to work offers a means to stay engaged and active.

György Deutsch worked as a welder for most of his life; when he retired 10 years ago at 65, he hoped his pension would cover his living costs, but with Hungary’s inflation outpacing his monthly income, he has returned to the workforce… as a welding instructor.

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“When I first retired, my monthly pension of $500 covered my basic needs, but now this is not enough. I need the extra income. My pension is worth less each day,” said Deutsch.

Deutsch is not alone; this year in Hungary, the number of men over the retirement age that have returned to work has tripled, and for women, it’s quadrupled. Analysts say the main reason for the disparity is women’s longer life expectancy.

“There are about 4.7 million people employed in Hungary this year; out of that number, the number of retirees that rejoined the workforce surpassed 100,000,” said Tamas Katona, a Professor of statistics and Demography at Szeged University.

“In some professions, such as education and healthcare, the average number of retirees returning to work is much higher,” he added. 

Hungary’s government announced a 15 percent increase in pensions last year, but for many, that was insufficient to cover their needs. The country’s current inflation rate is 17.6, the highest among EU countries. 

Prime Minister Viktor Orban introduced controversial price caps on food and fuel last year to bring inflation down to single digits, but the measures are no longer in place and economists disagree over whether they helped consumers.

The typical pension in Hungary is around $400 a month, making it one of the least generous in Central Europe. Economists argue that this is a key driver behind the growing trend of retirees rejoining the workforce.

Hungary’s pension system faces another critical challenge as more working-age people migrate to other EU countries for better-paid jobs. The number of Hungarians in neighboring Austria has reached an all-time high, making up 13 percent of the Austrian workforce.

Hungary’s former national bank governor says that a decade from now the country will have fewer workers than retirees.

“The problem is that those who are active now and working will retire and there is no one to fill the gap, unless there is an influx of migrants,” said Bod Peter Akos, former Governor of the Hungarian National Bank.

Meanwhile, Deutsch, who ecently turned 76 years old, says he will continue working while he is physically able to do so.

Aside from teaching, he has also picked up other welding jobs. Retirement, he says, will have to wait.

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