Thais slow in saving for their retirement

[webfact]

SAVING
Thais slow in saving for their retirement
THIRANAT SUCHARIKUL,
TANPISIT LERDBAMRUNGCHAI
THE NATION

Study finds people only investing in pension plans after age 42, which leaves them under-funded

BANGKOK: -- THOUGH MANY people in Thailand know it is important to start saving for their retirement, many begin putting away money quite late in life, which leaves many of them poor beyond the age of 60, a study showed.

Research on people's savings behaviour, presented at the Stock Exchange of Thailand yesterday, showed that Thais generally start putting money away for their retirement at around the age of 42, compared to 30 in the United States. It also showed that most Thais underestimate their future expenses, which leaves them poor at retirement.

Many locals are investing in their pension plans late in life, saying they need to acquire necessities such as cars and houses, as well as get married and go travelling before they turn 40.

Boonlert Jitmaneeroj, a researcher from the University of the Thai Chamber of Commerce (UTCC), said these numbers were worrying because this delay in planning for retirement will definitely affect the lifestyle of many people.

"It is like running a marathon," Boonlert said. "Some are still running the race while others have already reached the finish line."

He pointed out seven pitfalls that people face when saving for their retirement, all of which contribute to them being under-funded after retirement.

The pitfalls are: Planning too late, being too confident in their planning, misconceptions about planning, underestimating their expenses, underestimating their longevity, failing to save enough and retiring too early.

According to the study, the retirement savings gap minus the value of the real estate owned by people surveyed showed that 52 per cent will be under-funded by an average of Bt2.9 million upon retirement.

"People are saving money without a definite goal as they don't know how much money they will need when they retire - it's like running without a destination," Boonlert said.

People who encounter retirement fund shortages tend to be women who earn less than men and are not as ready to take investment

risks. Hence, he said, the authorities should raise awareness and educate people on investment alternatives, adding that everybody should be encouraged to save more and invest more. Also, he said, the retirement age should be extended to beyond 60.

Boonlert added that if retirement age was set at 62, it would positively affect 76 per cent of Thais who face an under-funded old age.

The UTCC study yesterday showed that more Thais are under debt and that the average debt per household had also increased from last year.

Credit easily obtained over the past five years had boosted Thai household debt to 82 per cent of the country's gross domestic product at the end of last year, when income could not keep pace with the growth.

Source: http://www.nationmultimedia.com/national/Thais-slow-in-saving-for-their-retirement-30239411.html


-- The Nation 2014-07-25

[terryp]

poor before 60 poor after 60 ...same same but different?

[CelticBhoy]

"It is like running a marathon," Boonlert said.

"..it's like running without a destination," Boonlert said.

Methinks old Boonlert here just moved from the Ministry of Sports.

[chainarong]

This is not confined to Thailand , the trouble is that disposable income gets smaller and smaller each week, like the trend everywhere, Thailand is no longer a cheap alternative on many fronts, how anyone can save for retirement on ten thousand BHT PCM is anybody's guess, the ones coming through in Oz now will need around three million to survive in thirty years time and anybody who knows OZ will know they've got mine and buckley's of reaching that target that excludes at least three financial crises where the banks will conveniently lose all your money , good-luck Thailand you will need it on this one.

[janpharma]

Thai "saving"??? ...

[JesseFrank]

Thais slow in saving for their retirement

I wonder what else they had expected from someone who earns 6000 Baht a month.

[Suradit69]

This is not confined to Thailand , the trouble is that disposable income gets smaller and smaller each week, like the trend everywhere, Thailand is no longer a cheap alternative on many fronts, how anyone can save for retirement on ten thousand BHT PCM is anybody's guess, the ones coming through in Oz now will need around three million to survive in thirty years time and anybody who knows OZ will know they've got mine and buckley's of reaching that target that excludes at least three financial crises where the banks will conveniently lose all your money , good-luck Thailand you will need it on this one.

"This is not confined to Thailand"

Exactly. The idea of a cozy traditional retirement for westerners in the middle and lower income ranks is becoming less and less likely in future. There are an increasing number of people forced to continue working into their 70's ... assuming they can manage to find work. Pensions and state Social Security were originally based on the assumption that most people would be lucky to live to 65 and few would receive payments for many years if they did. Now funding from those sources is becoming insufficient for even basic living expenses.

As a recent ad campaign and the title of a recent book in the US reminds people:

[OOLEEBER]

Shhhhh......Shhhhhhhhhhh........Shhhhhhhhhhhhhh.... SHOCKED !!

[smutcakes]

Thais slow in saving for their retirement

I wonder what else they had expected from someone who earns 6000 Baht a month.

Exactly, how the hell are people supposed to save when a large proportion are only just 'existing' now.

[worgeordie]

With too many Thai people living hand to mouth,or

even worse ,up to their eyes in debit,long term planning

is not a subject that Thai Governments or Thai people

think much about,and there is not much that can be done

about that for the foreseeable future,but the farmers might

be OK if they get their pensions.

regards Worgeordie

[Yann55]

Thais don't save for their retirement because they know that they will not die or get old, na. Unlike other 'think-too-much' nations, they are, and will be forever young. Simple.

Edited July 25, 2014 by Yann55

[binjalin]

Thais only ever save face and have no concern for tomorrow or any sense of responsibility as far as I can tell

[mogo51]

I recall having a discussion with my then Thai partner regarding saving for our future and retirement. Her response, 'not due, tomorrow you may die' - end of discussion.

[trainman34014]

I recall having a discussion with my then Thai partner regarding saving for our future and retirement. Her response, 'not due, tomorrow you may die' - end of discussion.

Yes; i've had similar responses like....'Money only something you need today if you not dead already' !!

[Krataiboy]

74.8 percent of the households polled said their debts have increased this year . . . average household debts amount to 219,000 baht representing an increase of 16.6 percent compared to last year. . .- Bangkok Post report today.

How on earth can you save for retirement when you are up to your eyeballs in debt?

Boonlert Jitmaneeroj, a researcher from the University of the Thai Chamber of Commerce (UTCC), said these numbers were worrying because this delay in planning for retirement will definitely affect the lifestyle of many people.

The numbers are worrying not because they mean most people won't have a "lifestyle" - an word invented by the advertising industry which says so much about the skewed values of modern society - but because they won't have a life.

[Thaddeus]

For most of the Thais I know, their children are their pension plan, and most pray for girls.

(and no, not for the reason that springs to mind for some here)

Edited July 25, 2014 by Thaddeus

[Traveling Sailor]

"The UTCC study yesterday showed that more Thais are under debt and that the average debt per household had also increased from last year.

Credit easily obtained over the past five years had boosted Thai household debt to 82 per cent of the country's gross domestic product at the end of last year, when income could not keep pace with the growth."

Yes, and the Thais that I know have yearly, not monthly, repayment of mortgage/construction loans. And, they never think about the payment until they get a notice from the bank telling them that the payment is due in one month. And, since they didn't save for this yearly payment every month, they are faced with a payment they cannot make. Example: 12,000 baht per month = 144,000 baht per year. To make matters worse, some banks will even loan money to people who have no provable income,

Lovely, created to fail, system.

[trainman34014]

They are so out of touch it's like those in high positions live on the moon....or more like with their heads in the clouds. Of course; this guy will be domiciled in Bangkok or thereabouts where the majority of high end salary earners are and for the most part they are oblivious to real life in the Rural area's, where most folks are too busy worrying about getting food on the table today and have no time to be studying pension plans.

I do wish some of these people writing articles would come out into the real Thailand just to see what it's really like by making a worthwhile 'study' before writing about anything.

[belg]

thai people save money? some i know, get their salary and within the week, the have 0 baht left

[wehavenofuture]

Thai "saving"??? ...

Somewhere I read, the average savings account of the average thai person (farmer, ladybar, khonkaprot, etc), is about 300 thb.

[VINCENT2012]

how can they save with for the lucky one they live a all family with 10 000/ 15 000 bath a mounth...the thai society is based on that the children will take care of the parents....since long long time and it work.....also most of the thai dont look for tomorrow or have project, they live day to day.so they dont save , they buy a bottle of lao khao and bye bye then.

[lucjoker]

thais are not slow in saving,

they simply never did ,and never will.

"..... for their retirement" ha ha ,they never look further than the next meal.

Most are retired when they leave school .

​And most of them are quite happy with their lives !

They dont want luxury ,only a new car and a new motorcycle and an i-phone and booze every day ,

so just everyday things .

[umbanda]

"The UTCC study yesterday showed that more Thais are under debt and that the average debt per household had also increased from last year.

Credit easily obtained over the past five years had boosted Thai household debt to 82 per cent of the country's gross domestic product at the end of last year, when income could not keep pace with the growth."

Yes, and the Thais that I know have yearly, not monthly, repayment of mortgage/construction loans. And, they never think about the payment until they get a notice from the bank telling them that the payment is due in one month. And, since they didn't save for this yearly payment every month, they are faced with a payment they cannot make. Example: 12,000 baht per month = 144,000 baht per year. To make matters worse, some banks will even loan money to people who have no provable income,

Lovely, created to fail, system.

Looking a lot like the US.....perhaps Thais wants just to catch up?

[ginjag]

Thais only ever save face and have no concern for tomorrow or any sense of responsibility as far as I can tell

To add this, how many times have you waited for a Thai person at a bus/train/airport/or any appointment, they are usually LATE they cannot save, their timing for anything is not important.

Thais in general will be late for their own funerals.

necessary things-----mobile/top ups----m/cycle and never mind about re payments--not paying a lodge money to parents--smoking/drinking--free style life--make up male/female. On the other hand== Good food/shower/toilets/bed/bedding/ and as you said responsibility are not so important.

Not all, but in general.

[Briggsy]

Who on earth wrote this rubbish? The Thai retirement plan has always been their kids. This ain't Andover.

[3NUMBAS]

doubt i f they have enough left over for saving after paying the ever increasing bills. then some say spend it all before someone in the family borrows it and never pays back.

if its known you have savings some family member will be itching to blow it on your behalf

[Prbkk]

Retire at 62? These are still spring chickens. Retirement age should be 75 or 80, at least ( particularly for non manual work)

[Tounge Thaied]

What are the options for the average Thai citizen to invest in their retirement? Do they have access to sign up for individual retirement accounts? Is this money invested in a long term plan?

[cardinalblue]

Stop drinking and gambling....

[gk10002000]

Frankly without a steady job or profession, I think it is hard for most people to save.  yes many blue collar workers in the USA do well and save and invest, but not as much nor as well as white collar workers such as engineers, bankers, etc. do.  Heck I am an engineer now 61 and most of the people and I do mean most of the people I work don't save anywhere near as much as they could or should.  I was lucky to have really banged things up on a 5 -6 year contract that saved a ton, but I was already doing OK and well above average.  So all those millions of Thais that work in a restaurant or a hotel, or whatever, they really can't save.