New report suggests married Thai couples add 7 to 11 years to retirement planning

           Manulife Asset Management today issued a report that finds many married couples in Asia, including in Thailand, are significantly underestimating the length of time they will spend in retirement and, as a result, are likely not accumulating sufficient retirement savings.
The report, entitled Live long and prosper? Retirement and longevity risk, is the fifth in Manulife Asset Management’s Aging Asia series. It provides retirement duration forecasts and assessments of longevity risk, the risk that a retiree will outlive his or her sources of income, for married couples in 1Manulife Asset Management Asian economies: China, Hong Kong, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Thailand and Vietnam.
          Michael Dommermuth, President, International Asset Management, Manulife Asset Management, explained: ̶Manulife Asset Management;We feel that marital status in particular is too often ignored in retirement planning. The vast majority of Thais continue to enter retirement as part of a married couple and thus should factor in the likelihood of one partner, usually the wife due to longer life expectancy for women, outliving the other. Not factoring in the potentially significantly longer life expectancy of a partner can increase the potential that they will outlive their retirement savings.”
          Tor Indhavivadhana, CEO of Manulife Asset Management (Thailand), explained: ̶Manulife Asset Management;The report finds that married couples in Thailand face average joint retirement of 3Manulife Asset Management.2 years, which represents a generally ‘higher’ degree of longevity risk relative to their peers across Asia. This is in part because Thais retire relatively early, as a large portion of private and public sector employees are subject to mandatory retirement at age 6Manulife Asset Management.
          ̶Manulife Asset Management;However, the level of longevity risk is in flux in many of the markets studied as we find a relatively high 66% correlation between a country or territory’s per-capita GDP and its average life expectancy[1]. Therefore, life expectancy and longevity risk could actually increase in Thailand going forward as the country is forecast to see strong economic growth and rising per capita incomes for many years to come[2].”
          Dommermuth added: ̶Manulife Asset Management;It is important to realise that any given individual has a 5Manulife Asset Management% chance of living longer than the average forecast period. Our research indicates that in Thailand the chances of outliving retirement savings can be substantially reduced if married couples either delay retirement or factor an additional 7 to 11 years into their financial planning.”
          Policymakers in the region are already taking steps to reduce longevity risk for their citizens. Many governments have raised their official retirement ages and this avenue is open to Thailand as well. That being said, the Aging Asia research series has shown that responsibility for retirement income security is increasingly shifting to individuals and that effective deployment of household wealth would reduce the chances of outliving retirement savings by delivering the potential for returns in excess of bank deposit rates.
          Indhavivadhana expanded on this: ̶Manulife Asset Management;As a financial service provider, Manulife Asset Management (Thailand) is doing its part to help mobilise household wealth and maximise returns potential. For example, we offer a variety of equity and fixed income pooled investment funds that give investors access to diversified portfolios of domestic or overseas securities. 
          ̶Manulife Asset Management;Given current volatility in Thai markets, we feel that investors should consider supplementing their domestic investments with exposure to foreign markets. Investors can choose funds which meet their individual risk tolerance levels and their investment goals, which may be achieving capital gains to maximize retirement savings or supplementing other sources of household income via the potential for regular dividend payouts.” 
          Manulife Asset Management’s Aging Asia series of reports and related resources can be accessed at: www.manulifeam.com/agingasia.