Aged Thai society will need more than just retirement lottery

Research on "Alternative Asset Management for Thai Elderly" found that 47% of the elderly have insufficient savings, and more than 40% lacked enough income or assets to sustain themselves after retirement.

Additionally, one-third of the elderly are considered "low-income" or "poor", and over 40% have savings of less than 50,000 baht. More than half still have expenses to support their children or relatives, and over 52.88% of the elderly are still in debt. Thus, creating savings for an ageing society is a crucial requirement.

The National Savings Fund (NSF) has introduced a new initiative, the "Retirement Lottery", approved by the Cabinet on July 16, to promote savings for retirement. This programme aims to encourage people to save for retirement by purchasing lottery tickets. 

Initially, about 20 million informal workers, National Savings Fund members, and social security Section 40 insured persons (Working without an employer) are eligible to participate, each able to purchase up to 3,000 baht per month in lottery tickets, which will become savings to be received at age 60. The government will not contribute to the lottery buyers or guarantee returns from these purchases.

Through this retirement lottery, individuals can potentially save up to 1.62 million baht if they save from age 16 to 60 by purchasing lottery tickets at 3,000 baht per month. 

Retirement lottery alone not sufficient

Although the retirement lottery is an incentive for the public to save and potentially accumulate millions of baht through monthly lottery purchases of 3,000 baht over 30 years or more, it may not be enough for retirement needs.

Danucha Pichayanan, secretary-general of the National Economic and Social Development Council (NESDC), had earlier mentioned in a special report on “Income Security for the Elderly: For a Better Quality of Life” that Thailand will become a completely aged society in 2023 and a super aged society in 2036, 12 years from now.

To be prepared for retirement, individuals need to have savings of 2.8 million baht to 4 million baht.

Studies suggest that urban residents will need at least 4 million baht in savings after age 60 to sustain their lives, while those in rural areas need about 2.8 million baht.

The pension system indicates that few retirees have sufficient income, and if nothing is done, 14 million people will rely solely on old-age allowances. Therefore, integrating more people into the savings system is crucial.

The NESDC has suggested two main points to increase savings:

● Promote savings to ensure income security for the elderly by raising awareness and increasing access to benefits, reviewing the maximum salary base for social security contributions, and adjusting savings rates to allow workers to save more. Meanwhile, the public can also prepare by saving consciously.

● Increase post-retirement income and financial knowledge by encouraging the elderly to engage in suitable work and enhance financial management skills (financial literacy).

While the retirement lottery provides a savings option, those planning for retirement cannot solely rely on this policy as it is insufficient for post-retirement needs. A comprehensive retirement plan, including appropriate savings and investments, is necessary to ensure adequate returns for retirement.