Plan your retirement with a provident fund.

When talking about investing to prepare money after retirement for private company employees, you must think of provident funds. Further to be a good way to save money, there are also 5 other benefits:

1. Like receiving an additional salary from the contributions paid by the employer

There is no other form of savings that has an employer to help save like a provident fund. If you are already a member of this fund, the employer will pay additional contributions to the fund. This amount of money is like an employee who receives extra money from an employer. The contribution will be paid at the rate specified in the regulations of the fund of each employer. at a rate of not less than 2% but not more than 15% of the wages

2. Increase investment opportunities with Employee's Choice

Currently, the law allows each member of the provident fund to choose an investment policy that is suitable for themselves (Employee's Choice) by choosing an investment policy based on their own acceptable risk level and their own return. need You should choose a policy or investment ratio that is consistent with your age. desired return and acceptable risk level It will help generate appropriate long-term returns. Makes more savings from investments, for example, even with a low level of risk. I don't like changes in investments. But if the young age is the age to start working Choosing an investment policy with a higher percentage of risky assets will help generate more long-term returns.

3. Create long-term investment discipline

Investing in provident funds is considered long-term savings. The aim is to have a retirement income. Having regular investments every month, creating discipline in investing before using them, so if you are a member of the fund from the first month of work, you will have a large sum of money for retirement.

4. Get a professional to take care of the money

Professional fund managers will look after and manage our funds on our behalf. In addition, the average provident fund management fees are lower than other types of funds. This lower fee will help you grow more money in the long run.

5. Tax benefits

The savings in the provident fund saves on taxes on every connection. Since the accumulated money sent to the fund can be used for income tax deduction rights. Investment benefits and the money received from the retirement fund (both member's money employer's contribution and interest on investment) will be exempt from tax. If the retirement age is not less than 55 years and has been a provident fund member for at least 5 years.

Basic savings management from the provident fund for the purpose of having money to use after retirement has 3 tips: change investment options or do both techniques concurrently

Example of increasing the savings of the provident fund

1. 25 years old, salary 25,000 baht (the rate of salary increase is 3% per year)

2. Accumulate money into the fund 3% per month, employer contributions 3% per month, assuming a return of 5% per year.

3. If desired to use 20,000 baht per month after retirement, assuming a return after retirement of 2% per year (inflation rate of 3% per year) and expect to die at the age of 85 years.


Money to use after retirement

Savings from the provident fund at age 60



1.Do nothing

6,761,921 baht

2,723,144 baht

short of 4,038,777 baht

2. Increase your savings to 10%, employer contributions 5%.

6,761,921 บาท

6,807,861 บาท

เงินเกิน 45,940 บาท

3. Change investment options Assuming 8% annual return but still accumulating 3% monthly contributions, 3% monthly employer contributions.

6,761,921 baht

5,196,088 baht

short of 1,565,833 baht

4. Increase your savings to 10%, employer contributions to 5% and change your investment options. Assuming a return of 8% per year

6,761,921 baht

12,990,219 baht

6,228,298 baht over

Notes: From the calculation method of Stock Exchange of Thailand

From the data, it was found that if nothing was done on the retirement date (age 60), there would be only 2,723,144 baht from savings through the provident fund, with 4,038,777 baht missing (the money needed after retirement, 20,000 baht per month, or 6,761,921 baht throughout life after retirement)

If you choose to increase your savings to 10% per month, assuming the employer contributes to 5% per month, you will have money from savings through the provident fund of 6,807,861 baht, which will exceed the target of 45,940 baht.

If changing investment options Assuming an additional return of 8% per year, but still collecting money into the fund 3% per month, employer contributions 3% per month, there will be money from savings through the provident fund 5,196,088 baht, lack of money 1,592,834 baht

If you choose to increase your savings while changing your investment options (method 4), you will have 12,990,219 baht from savings through the provident fund, reaching 6,228,298 baht in excess of your goal.

for investment policy Currently, many companies allow employees to participate in choosing an investment policy that is right for them (Employee's Choice) by having an investment plan that is a mixture of investment assets, such as mutual funds. Fixed Income Fund by investing both at home and abroad and there is an investment plan based on age balance (Target Date), which is an investment policy that has allocated investments according to the members' age, which automatically adjusts the investment portfolio as the age changes.

For those who are close to retirement, such as 50 years old, if they have been a member of the provident fund since the beginning of their work, they will have millions of baht in this fund. Therefore, choosing an investment policy should reduce investment in high-risk assets.

However, since it is a long-term investment, there may be volatility along the way from various situations.

Therefore, before deciding to adjust your investment portfolio by focusing on low-risk assets, you should Study the information thoroughly. closely monitor the situation Because if changing the policy to invest in low-risk assets, such as during the COVID-19 virus outbreak, it may result in loss of benefits. Because the fund management company has to sell shares in the members' equity at the current price. This may be sold at a cheap price and then used to buy bonds. Also lose the opportunity to get good returns when the share price rises.

The basic principle of portfolio adjustment is to diversify your investments in a variety of assets to reduce the volatility of the portfolio and still get a good return.

Therefore, provident funds are a viable long-term investment option for salarymen. because in addition to helping to create money to prepare for use after retirement also receive contributions from employers to help save, get the right to reduce the tax. So, start saving early, save to the full right and choose a good investment policy. The amount of retirement savings will increase impressively.