The earlier you plan, the easier the retirement | Bangkok Post: business

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The earlier you plan, the easier the retirement

  • Published: | Viewed: 1,401 | Comments: 0
  • Newspaper section: Business
  • Writer: Teera Phutrakul CFP
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To someone mid-career, retirement can seem such a long way away. But this is precisely where the battle for a happy retirement is won and lost. If you leave everything to luck and hope there will be a crock of gold waiting for you at the end of the retirement rainbow, then good luck to you. But realistically, would you leave something as important as your retirement nest egg up to chance? 

A good place to start in finding out whether you are saving enough for your retirement is to use a simple rule of thumb by multiplying the annual income that you need to live on during your golden years by 22. Let’s suppose you desire to have 50,000 baht a month, which is 600,000 baht a year, during retirement. You need to aim for retirement savings of 13.2 million baht (600,000 baht x 22) by the time you are ready to retire.

If you find the above numbers too daunting, do not despair because you are not the only one! Even if you are already in your 40s and 50s, you still have a good 10 to 20 years to catch up on your retirement savings. You will be surprised what compounding at 8-10% per year can do to your retirement nest egg. As for the second challenge, where do we find 8-10% investment return over the long run? Bank deposits and bonds certainly will not do the trick. Only equity can give you that kind of return over the long haul. However, make sure that your portfolio is sufficiently diversified with both onshore and offshore securities.

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