Thailand's retirees will make up 20% of the population over the next decade and jump to one-third by 2035, says the Capital Market Academy (CMA).
Southeast Asia's second-largest economy is progressing through the ageing society category at an accelerated rate, whereby those over 60 stood at 11 million or 16% of the total population last year, said Pornanong Budsaratragoon, CMA's president of academic affairs.
"By 2025, those over 60 years old will account for more than 20% of the total population, after which Thailand will enter the level of super-aged society, where retirees make up 30% of the population by the year 2035," Ms Pornanong said.
Economic growth in an ageing society is normally slow because of the lack of labour force, while the greying demography increases the government's social welfare spending, she said.
To prepare for this burgeoning silver population, the government has designed four social welfare programmes for retirees, said Varothai Kosolpisitkul, deputy director-general of the Finance Ministry's Fiscal Policy Office and a member of the acting committee of the National Savings Fund (NSF). These include healthcare benefits, the reverse mortgage scheme for retirees who have no relative to take care of them and want to finance their houses for monthly revenue, providing occupations for the elderly, and income preparation.
The government created the NSF for self-employed individuals, or those working in the informal sector, to save for retirement. The NSF only has 525,000 members, though there are 25 million self-employed, Mr Varothai said.
The scheme requires 40-year-old workers to save 20% of their income, with savings mainly invested in Thai government bonds, generating a 6% annual return on principal. The investment is meant to create monthly income at the rate of 50% of current income once members reach retirement.
"Thais need to prepare for retirement or they will struggle financially when they are old," Ms Pornanong said.
The capital market is another tool to help people meet their retirement saving targets, as equity investment will help generate a 6% annual return, she said.
The CMA plans to launch a mutual fund where the sum provides monthly income upon retirement. The fund should help with daily spending and health insurance coverage.