If someone asks you “Is 500,000 Baht enough for a living after 60 years old?” Most answers will be the same direction which is “No”. So, there will be the following question, “Have you ever try to save some money at all?”. Many people may say that “I tried but I do not know why it did not grow as I planned.”
So, talking about saving for retirement, there are some main factors that affect our money plan such as
The person with greater money-saving at the beginning is better. For example, there are 2 people with the same money target. Mr.A and Mr.B are 30 years old and plan to retire at 60 years old. Mr.A decided to save 50,000 Baht from his bonus for a starter then regularly save 3,000 Baht every month. Mr.B start with 20,000 Baht and regularly save every month 1,500 Baht. Finally, Mr.A will have a greater amount than Mr.B and has a chance to succeed in saving money.
It is true that having a higher return from the investment helps you reach the goal sooner. For example, if you want to have 5 million Baht for retirement and you save 3,000 Baht every month with an average 5% per year in return. This takes you 498 months or 41 years to complete. However, with a higher return of 8% per year, you have to save only 375 months or 31 years. This helps you reach the goal sooner!
The faster saving person will have more money than the later. For example, Mr.D and Mr.G who plan to retire at 60 years old. Mr.D start saving money 3,000 Baht every month since 25 years old and Mr.G start saving at 40 years old, 3,000 Baht every month. This means Mr.D will have more money than Mr.G.
So, you know what affects your money-saving for retirement then we will show you another interesting way which is the Life Path Portfolio which is “Younger with larger indexes, and Older with smaller indexes.”
This means that your portfolio will be adjusted according to your age. When you are young, your portfolio should invest in a high-risk investment to get a high return such as index. This is the time that you can absorb the high risk with a longer investing period until retirement and find a way to fix it in case anything unexpected happens.
The risk in investment should be changed according to your age. Then when you reach retirement age, all risk in investment should be reduced to the minimum point to secure your money.
This life Path Portfolio is recommended among Thai people. In the past, it was introduced only in the provident fund and RMF. Currently, it has been opened for the public.
If you are interested in this life Path Portfolio fund, you can tell the asset management staff about your age and your retirement plan. Then they will put you in the same-aged people and proper portfolio. Eventually, your investment plan will be adjusted automatically based on your age.ติ
Example of the Life Path Portfolio for money management after retirement
Currently, there are people who plan their retirement improperly such as 80% in bonds and 20% in indexes. So, if that time the economy grows, index in the market will get a high return and this will result in a low return for this portfolio. Another example is to invest 90% in the index and 10% in bonds. Then if there is an economic crisis, the index market will fall and that portfolio also falls.
Therefore, the Life Path portfolio is suited for anyone who does not have enough knowledge to select what to invest in, also have no time to follow the news or does not want to adjust their portfolio by themselves but want to invest and get a high return in a young age, average return in their middle and save the capital before retirement.
To avoid any mistake from an investment, this Life Path Portfolio is an option to help you reach your goal and save money for retirement.