KKP Chief Economist Warns of Thailand's Aging Crisis and Urges Personal Financial Planning

Key summary

Dr. Pipat Luengnaruemitchai, chief economist at Kiatnakin Phatra Financial Group (KKP), stated that Thailand is aging faster than its income can support, leaving most workers unprepared for retirement. Speaking at a media briefing on November 2, he noted that about 24% of Thais are already over 60, a figure projected to rise to roughly one in three within 25 years based on UN data cited by KKP (36% by 2049). The number of workers per older person is expected to fall from 5.5 to 1.8 by 2060. Dr. Luengnaruemitchai highlighted that Thailand's median age of about 41 years is similar to China's, yet GDP per capita is only about US$7,200, roughly half of China's. He identified Thailand as the only ASEAN economy with a shrinking population, expecting growth of around 2.5% this year, which would make it the slowest-growing economy in Asia compared to Taiwan, Vietnam, and Malaysia.

Surveys indicate poor preparation for retirement; a Society of Actuaries Research Institute poll of 750 private-sector employees found that while 86% expect to retire as planned, only 5% actually do, and 73% reach retirement with less than 60% of what they need. Pension coverage is limited, with only about 3.1 million people in provident funds out of a labour force of roughly 50 million (under 10%). Social security pays at most 5,000 to 7,000 baht a month for those who contribute throughout their working lives. Around 70% of income for Thais over 60 comes from children or continuing work, while only about 7% depends on retirement savings.

Dr. Luengnaruemitchai warned that the social security fund could run short within 20 to 30 years, leaving options of higher contributions, a later retirement age, or lower benefits. The 30-baht healthcare scheme may be difficult to sustain in 15 to 20 years. He outlined a three-part framework: budgeting (using the "4 per cent rule" implying savings of about 25 times annual spending), protecting against unexpected costs via insurance and cautioning against relying solely on tax-deductible RMF contributions, and investing early while keeping funds invested after retirement.

KKP data shows medical costs rising about 11% a year, elderly care 6%, and private schooling 7%. At 3% inflation, annual spending of 720,000 baht today would double to about 1.75 million baht in 30 years. A 60-year-old Thai can expect to live another 23.5 years on average, with a 35% chance for a woman reaching 60 to live to 90. Dr. Luengnaruemitchai advised diversifying beyond Thailand, noting that 97% of provident fund assets are invested domestically while Thailand accounts for just 0.14% of the MSCI All World index. Over ten years to August 2026, the SET delivered annualised returns of 3.7%, against 13.0% for global equities and 15.4% for the S&P 500.

Narit Kosalathip, head of personal investment advisory at Kiatnakin Phatra Securities, announced a retirement series starting with goal conversations rather than products. The KKP Ready Retire 2045 and 2035 funds, available in ordinary and RMF versions, are managed with Capital Group and shift gradually from growth assets towards income. At maturity, they convert into the KKP Lifelong Income fund, aiming to pay roughly 4% a year while preserving capital. The KKP Advanced Income fund targets higher payouts of about 5 to 7%, at the cost of drawing down principal. The minimum investment is 1,000 baht. Narit stated the funds do not guarantee capital and investors may receive less than they put in.