NO COUNTRY FOR OLD MEN: HOW TO COPE WITH THE LOOMING RETIREMENT CRISIS

Much has already been written about the rapidly ageing society in Thailand but one recent figure caught my attention. According to the Fiscal Policy Office, only 5.4% of retired citizens have the means to survive on their own savings or from the sale of their properties.

If the said figure is to be believed, it appears the chicken may be coming home to roost sooner than earlier anticipated. If 95% of retirees have to rely on government handouts and financial support from their adult children, then we are in for a real social crisis on an epic scale.

What I find truly amazing is the sheer number of senior citizens that have failed so badly at something as important as one’s own well being during the golden years. Did they think that they can just wing it by not saving enough when they were young and hope that all will be well when they are old?

I am certain this laid-back, “No worries” attitude can not only be a Thai phenomenon. I believe other cultures have similar sayings about work/life ethics too. In French, it’s “C’est la vie”, which means “That’s life”. The Italians and the Americans have similar sayings as well, “La merda succeed”, which loosely translates into “Sh*t Happens”.

But it seems Thai people take this “Enjoy life when you can and earn it when you can’t” work ethic to a whole new level. In a way who can blame them? In the land of plenty with fish in the water and rice in the field, as Thailand is famous for, the people don’t have to work too hard. Not lazy but doing enough work just to get by. Moreover, by tradition, younger people — read daughters — cared for their ageing parents without exception.

I have often wondered how my grandfather generations managed to cope with their retirements. Back then, there were no safety nets to speak of. No social security fund, no provident funds, no Retirement Mutual Funds (RMF) and yet they seem to have managed just fine. They never became a burden to their children and when they finally passed away, the inheritances were more than enough for the beneficiaries to live in comfort.

May be it has something to do with their work ethics. Like most Chinese immigrants, my folks came to Thailand escaping poverty and persecution, and like so many of that generation, they arrived penniless. In spite of the odds, they survived and thrived here and have created descendants instilled with a strong work ethic.

A century later, the third and fourth generations, in other words my generation, are struggling again with the meaning of life. May be we spent too much time listening to the likes of the Dalai Lama who was asked what surprised him the most about human nature and this is what he said: “Man sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then he dies having never really lived.”

Without trying to be too philosophical about life, here are my 2 Cents-worth of advice on how to cope with retirement funding:

Rule 1: Aim high. Don’t be a burden to anyone when you retire. Not to your children and especially not to society. Only losers do that.

Rule 2: Pay Yourself First. Unless you sock away 20% of your income for retirement you cannot retire in comfort. Period.

Rule 3: Go for the low-hanging fruits. A good place to start saving for retirement is through the many tax-exempted savings schemes, namely provident funds, RMFs, retirement life insurance policies.

Rule 4: Invest for the long term in growth assets. Think like a business owner and invest in shares for the long term. As a rule of thumb, you should

hold a percentage of stocks equal 100 minus your age. So for a typical 40-yearold, 60% of the portfolio should be in stocks.

Rule 5: Keep expenses low. Whenever possible go for low cost index funds and Exchange Traded Funds (ETF).

Rule 6: Diversify. The Thai stock market is small, making up only 0.35% of global market capitalisation. To construct a proper retirement portfolio, you need to diversify offshore.

Finally, you cannot have a million dollar dream with a minimum wage work ethic and don’t be upset with the results you did not get from the work you did not do.