Thailand is entering an era of unprecedented longevity

Thailand is entering an era of unprecedented longevity. Advances in healthcare and medical technology are allowing people to live significantly longer than previous generations, creating both opportunities and challenges for retirement planning.

According to Kasikorn Asset Management (K-Asset), longer life expectancy means many Thais may need to finance 20 to 30 years of living expenses after retirement, making traditional saving habits increasingly inadequate.

Today, the average Thai man is expected to live to around 85, while women can expect to live to an average of 88.

For someone retiring at 60, they should prepare for another two or three decades of living without regular employment income.

"The biggest challenge for people living longer is their savings are not growing at the same pace," said Win Phromphaet, executive chairman of K-Asset.

"Many underestimate how much money they will actually need after retirement."

RETIREMENT CRISIS

The retirement challenge begins with a broader financial issue: insufficient savings.

Data provided by K-Asset indicates 48% of Thais have emergency savings that would cover less than one month of expenses. Financial planning principles generally recommend maintaining reserves equivalent to 3-6 months of living costs, yet only 17% of Thais meet that standard.

The situation is even more concerning among retirees. Almost 45% of elderly Thais have no savings at all. Among those who have managed to save, more than 64% hold less than 100,000 baht.

At the opposite end of the spectrum, only around 1% of Thais have accumulated more than 3 million baht in savings.

The consequences are increasingly visible across society. Around 35% of retirees continue to depend primarily on financial support from their children, while another 33% remain in the workforce because they cannot afford to stop working.

Government elderly allowances of roughly 600 baht per month provide only limited support and are insufficient to cover basic living expenses.

"These figures suggest that retirement insecurity is no longer a future concern -- it is already affecting millions of households today," said Mr Win.

COST OF LIVING

One of the most common mistakes in retirement planning is underestimating the amount of money required to sustain a comfortable lifestyle after leaving the workforce.

According to K-Asset estimates, a retiree who expects to spend 15,000 baht per month for 20 years after retirement would need roughly 4 million baht in retirement savings.

For someone seeking monthly spending of 20,000 baht until age 90, the amount rises to roughly 5.5 million baht.

However, those figures assume a retirement portfolio generating an average annual return of around 4% to keep pace with inflation, estimated at roughly 1.3% per year.

Without reasonable investment returns, the picture changes dramatically.

A retiree relying solely on cash savings or low-interest bank deposits would need roughly 7.2 million baht to maintain monthly spending of 20,000 baht over a 30-year retirement period.

The difference highlights a crucial reality facing future retirees: saving money alone may be inadequate to fund your retirement, Mr Win noted.

THE GREATEST RISK

For many Thai households, bank deposits have been the preferred savings vehicle for decades because they are simple, accessible, and perceived as safe.

Yet deposit rates often remain less than 1%, making it difficult for savings to outpace inflation.

While keeping money in the bank reduces short-term market risk, it leads to the gradual erosion of purchasing power.

"The greatest retirement risk is not market volatility. It is the inability of savings to grow fast enough to support a retirement that could last 30 years," said Mr Win.

Financial planners increasingly warn about two major threats facing retirees: longevity risk, which is the possibility of outliving one's savings; and inflation risk, as the gradual increase in living costs reduces the real value of cash over time.

As life expectancy continues to increase, these risks are becoming more significant than many people realise, noted K-Asset.

WEALTH PRESERVATION

To address these challenges, financial planners recommend diversified investment portfolios rather than concentrating assets solely in cash deposits or domestic investments.

Many Thai investors continue to allocate most of their wealth to local assets such as Thai equities, bonds and domestic real estate. While these investments remain important components of a portfolio, relying exclusively on a single asset may limit long-term growth opportunities, said Mr Win.

Investors should consider broader diversification across geographies, sectors and asset classes, he said.

A balanced retirement portfolio may include domestic and international equities, fixed-income instruments, and alternative assets, depending on an individual's goals, investment horizon and risk tolerance.

Global diversification can also provide access to structural growth themes that may not be fully represented in the Thai market, including artificial intelligence, digital transformation, healthcare innovation and emerging technologies, according to K-Asset.

The objective is not simply to pursue higher returns, but to build a portfolio capable of generating sustainable growth while managing risk over multiple decades.

Another common mistake among investors is maintaining the same portfolio allocation throughout their entire working life, said Mr Win.

Many members of provident funds choose an investment plan once and rarely revisit it, he noted. As the years pass, their portfolios may no longer match their age, financial objectives, or ability to tolerate risk.

This challenge has led to growing interest in lifecycle investing, a strategy widely adopted in retirement systems around the world.

The strategy holds that investment risk should gradually change as an investor ages.

For individuals in their 20s, 30s and early 40s, portfolios can generally maintain higher exposure to growth-oriented assets such as equities because they have sufficient time to recover from market fluctuations. A portfolio during this stage may allocate as much as 85% to equities to maximise long-term wealth creation.

Around age 45, roughly 15 years before retirement, investors may begin reducing portfolio risk gradually.

"This period is often considered the optimal transition point," said Mr Win.

"Reducing risk too early can limit long-term growth potential, while waiting too long may expose retirement savings to unnecessary market volatility."

By retirement age, equity allocations are typically reduced to around 30%, while more conservative assets play a greater role in preserving capital and generating stable income.

The goal is not to eliminate risk altogether, but to ensure that investment risk remains appropriate for each stage of life.

PLANNING

As Thailand become an aged society, retirement planning is becoming one of the most important financial challenges facing households.

The solution is not simply saving more money, but adopting a more comprehensive approach that combines disciplined saving with long-term investing, according to planners.

For individuals who lack investment expertise, professional financial advisors or diversified mutual funds can help build portfolios aligned with retirement goals and risk tolerance.

"The biggest retirement mistake is not simply failing to save enough. It is failing to make savings grow," said Mr Win.

For a generation that may spend three decades in retirement, financial security will depend on more than accumulating cash. It will require thoughtful investing, diversification, and a willingness to adapt investment strategies over time, he noted.

As people live longer, ensuring retirement savings can sustain decades of post-work life is a major financial challenge.