“Truth of Life” and “Financial Planning” Living Well & Leaving Well

As the Chairperson of Cheevamitr Social Enterprise Co., Ltd., a non-profit organization dedicated to educating people on preparing for a good death, or what is more elegantly called "Living Well" and "Leaving Well," I have had the opportunity to give lectures to interested individuals on several occasions. More recently, I have spoken with working professionals and senior citizens about preparing for death through investment, making wills, and creating living wills, at various events.

This article therefore applies the truths of life to the context of financial planning and legal preparation for living a meaningful life, or a life that is good and ends happily, or a good death.

As everyone knows, the undeniable truths of life are birth, aging, illness, and death. While modern science and medical treatments can potentially delay these stages by maintaining good health and using advanced medications and equipment, this is only possible for a limited time. The reality is that aging, illness, and death are inevitable for all of us. The question is, how do we cope with these natural realities when they affect us or our families? Therefore, we should plan and prepare to live a high-quality life throughout our lives: while we are alive, working, aging, becoming ill, and finally, after death.

Most people plan for their working lives, earning money, finding housing, getting married, and starting a family, but few plan for old age, illness, and death.

TheWork and financial planning. Preparation

From birth, people go to school, work, and build families. Parents who are knowledgeable, financially capable, and financially savvy can usually plan to save and accumulate assets to raise their children and grandchildren. This includes education, housing, marriage, and even planning to leave any remaining assets to their descendants.

Business owners may also have expectations for their children to inherit the business. This group often plans their finances and investments, whether through bank deposits, stock market investments, health insurance, or life insurance, to ensure sufficient returns for themselves or their families to live a quality life, both in the short and long term.

Therefore, if such individuals possess financial literacy, they will be able to live well and with quality of life throughout all stages of their lives.

Due to the very low level of financial literacy among Thais, household debt has become higher than in many other countries, especially among civil servants, employees, farmers, and agricultural workers. Now, a worrying trend is emerging as younger generations, Gen Y and Gen Z, are also burdened with significant debt.

Therefore, building financial literacy, investment, and saving knowledge among the Thai people must begin seriously within families and educational institutions.

Currently, such education can be disseminated through various forms of social media. Therefore, it is the responsibility of relevant agencies, including the government, the Ministry of Finance, the Bank of Thailand, the Ministry of Education, the Ministry of Higher Education and Innovation, the Stock Exchange of Thailand, and the Securities and Exchange Commission of Thailand (SEC), to seriously develop and provide this knowledge to the public and students.

This won't be easy because even teachers, students, and civil servants have very high levels of debt, forcing the government to implement policies to suspend debt payments, reduce debt, and restructure debt. I believe this is addressing the symptoms rather than the root cause of the problem.

Therefore, promoting and developing knowledge about saving money, investing, purchasing health insurance, and purchasing life insurance among the public is crucial. Relying solely on social security or the 30-baht universal healthcare scheme is insufficient, as various government funds may not be able to cover expenses indefinitely.

old age What are the social impacts of extending the retirement age in Thailand?

Aging, or an aging society, is occurring worldwide, and Thailand, being a fully aging society, raises the question of how to ensure that these elderly individuals can maintain a good quality of life without becoming a burden on society. While current scientific advancements can slow the aging process, these are primarily effective for wealthy individuals, or those with high incomes.

Most elderly individuals in the country, regardless of their financial situation, still need to understand the consequences of not having savings or investments. If these elderly individuals haven't planned for investments since they started working, it will undoubtedly become a long-term burden on themselves, their families, and society.

Currently, the definition of "elderly" is individuals who have retired from work, using the criterion of age 60. However, facts from a survey by the Institute for Population and Social Research, Mahidol University, in January 2565, and the 2564 report on the situation of the elderly, show that Thai men have an average life expectancy of 78 years and Thai women 84 years, which is significantly higher than in the past. Currently, Thailand has 12.5 million elderly people, more than the number of children under 15 years old, which is around 11.1 million. This means that Thais are living longer, but the population growth rate is decreasing.

Another important piece of data is that only 1.5% of elderly people have savings as their primary source of income. Of those, 32.4% still depend on income from work, 32.2% from children, 19.2% from pensions, 7.5% from employment, and 4.5% from spouses. The lack of independent income among the elderly therefore presents a long-term problem for the country.

Should the retirement age be extended?

Therefore, considering extending the retirement age is a legal and policy issue that needs to be considered. How necessary is it to extend the retirement age to 65 or 70 years, whether in the public or private sector, so that individuals can earn their own income instead of depending on others?

The money you need for retirement.

A crucial and alarming piece of information is that if anyone retires and lives for at least another 20 years—meaning if they retire at 60 and live to 80—they should have a minimum retirement savings of 4,186,000 baht to cover their living expenses of 500 baht per day, or 15,000 baht per month, for another 20 years. In reality, 15,000 baht today will be worth 27,092 baht in 20 years, based on a 3% inflation rate.

I believe that very few people who retire, whether from the public or private sector, have more than 4 million baht in their savings. And for married couples, that would require at least 8 million baht in savings.

Therefore, those who have reached retirement age, or are about to reach old age, must have planned their finances, health insurance, and life insurance from the beginning of their working lives. If they try to plan after retirement, it will be difficult to achieve a complete financial plan for their family.

You should make a regular will and a living will.

Regarding asset planning, if a plan has already been made, including wills and living wills for the elderly, in addition to life insurance, health insurance, and investments, individuals who have saved sufficient assets should consider creating a will to distribute or manage their assets among heirs or family members to avoid problems.

Promoting the making of wills among Thais, regardless of whether they have little or much wealth, is a good solution to prevent problems. This requires dispelling the belief that making a will is a form of self-cursion.

Beyond drafting a will to divide assets among children and heirs, preparing a living will during illness is crucial, as it impacts family conflicts and the costs of prolonging life.

Educating the public on this issue is therefore crucial. When individuals or families unreasonably try to prolong the death of their loved ones, it inevitably affects the family members both emotionally and financially.

Therefore, I recommend that individuals who are still healthy, or those who are at risk of illness, should complete their wills and living wills. This should be done before illness occurs. In fact, such preparations should begin when one is young and working, not waiting until old age or illness, as it may be too late.

Life insurance, health insurance Choice or survival?

The next question is, as our elderly population grows, and most of them lack sufficient funds and assets to care for themselves, and even if they do have assets, what can we do to ensure that these elderly individuals, who suffer from dementia, Alzheimer's, or are legally incapacitated or unable to manage their own assets, can use their savings for healthcare and admission to senior care facilities or nursing homes?

I think there are other issues that the government should take responsibility for addressing, such as establishing trust legislation, promoting the creation of institutions for elderly care or end-of-life care with joint public-private partnerships (matching funds), ensuring a high quality of life for the aging population, and amending laws to allow for the pre-appointment of guardians or conservators, similar to practices in countries like Japan, the UK, and France.

Buying health insurance versus buying life insurance.

There is some interesting information regarding how we should plan our lives for those who retire from work, which currently averages 55 to 60 years old. Retirement ages have been divided into three ranges:

Phase 1: Early retirement, ages 55-69, when individuals are still healthy and able to use their knowledge and skills to work and earn a living. They can use their savings to travel and pursue activities they once enjoyed, such as organic gardening, farming, exercising, or playing golf, as they had always hoped.

The second stage, around the age of 70-80, is considered the middle retirement age. During this period, earning capacity decreases, and individuals may need to rely on others, particularly family members. Healthcare expenses also increase, especially if illness occurs.

The third stage, upon reaching age 80, marks retirement or the true end of old age, which may require care and necessary expenses. This includes housing in a senior care facility and medical expenses, which may have begun during stages 2 and 3 (ages 70-90). Therefore, financial planning to ensure sufficient funds are available during this period is crucial.

The Stock Exchange of Thailand has a website or educational resource called Happy Money that retirees should explore. The website states that retirees need to prepare for three things for a happy retirement: physical and mental well-being, housing, and finances. (In reality, even those who are not retired should prepare and study this information in advance.)

Preparing your body and mind means starting to take care of your health to stay strong, by prioritizing health insurance. Ideally, you should purchase health insurance while you're working, before retirement, in addition to your company-provided insurance (if any), because the premiums are not very high. Buying health insurance close to retirement may result in being unable to purchase it or the premiums being extremely expensive.

The facts show that health-related expenses, excluding medical treatment, account for 12% of total expenses after retirement. This is followed by housing at approximately 21%, recreation at 17%, daily living expenses at 8%, and transportation at 22%. If illness occurs, care costs could range from 10,000 to 20,000 baht per month.

When choosing insurance that covers both life and health, there are several options: term life insurance focused on debt protection, whole life insurance for inheritance purposes, but most importantly, endowment insurance for savings and annuity insurance to cover expenses in old age, with payments received upon death or completion of the contract.

In real life, people need financial protection in many dimensions: as retirement income, for children's education, for medical expenses, to pay off debts, as personal assets, as income for the family, and as inheritance funds.

Therefore, purchasing health and accident insurance is very important, and Thais should start getting health insurance from a young age while they are still healthy. The insurance should cover disability compensation, medical expenses, critical illnesses, premium payments, and personal accident insurance. It is recommended that the appropriate life insurance premium be no more than 10% of your annual income.

Preparing to find housing.

Regarding housing preparation, I believe that the homes previously purchased by the elderly may not have been designed for senior living. Therefore, it may be necessary to sell existing assets and rent them short-term or long-term, in a senior living community or a home specifically designed for seniors. This could be achieved by selling existing assets or entering into a reverse mortgage, using savings to rent a quality senior care facility or residence, either public or private.

Retirement financial planning typically prioritizes living expenses, medical costs, expenses to enhance the happiness of children and grandchildren, and, if there's any surplus, charitable donations to society after their passing.

Preparing for illness. Proposed amendment to the law.

Illness: Everyone, after birth and aging, experiences illness. In real life, we cannot choose our illnesses; we cannot opt ​​for a simple death to avoid prolonged suffering, whether it's being bedridden or contracting an incurable disease.

The most significant problem is the illness of elderly people, who may be in a state of incapacity or near-incapacity. This means they might suffer from dementia or be unable to conduct financial transactions independently.

Pre-arranging for the appointment of a legal guardian or conservator to care for a person deemed incompetent or incompetent is not permissible under Thai law.

I have previously written that current law limits the appointment of a guardian or conservator to family members only. Importantly, the appointment requires waiting for the individual to meet the legal requirements before seeking court permission. This is a point of much debate among relatives, spouses, and descendants, especially those with significant inheritance.

Therefore, I propose the enactment of a trust law and amendments to the Civil and Commercial Code to allow individuals who are still of sound mind to appoint a guardian or trustee in advance by registering with the relevant authority.

Tax exemption for senior citizens.

Regarding the issue of the elderly, tax law should consider exempting them from taxes if their annual income is less than 1 million baht. Regardless of the source of their income, the government should not tax these expenses. Current laws allow for the deduction of such expenses, but the exemptions are not sufficient.

Such amendments to the tax structure specifically for individuals will require careful and thorough consideration.

death Regarding inheritance tax:

Death is inevitable for all of us, so it's essential to plan from the start, both physically and mentally, and regarding finances. Those who have made wills or living wills should ensure that their passing is without problems for those left behind, allowing them to die with dignity and respect.

If a deceased person or heir has assets exceeding 100 million baht to be passed on to their heirs, they are subject to inheritance tax on the amount exceeding 100 million baht, at a rate of 5-10%. Preparing funds for inheritance tax is standard practice. However, if the inherited assets are not cash and are in the form of bank deposits, purchasing life insurance to ensure heirs have sufficient funds to pay the inheritance tax is something people plan for.

The final chapter The truth is something everyone must face.

For me, the truth of life, to be happy while alive, in old age, or when ill, and to pass away with dignity, is to prepare both physically and mentally, as well as to plan and manage existing assets to benefit both the community and oneself.

Letting go of attachments, learning to be comfortable with oneself, and understanding the Dharma of one's own religion will allow us to live meaningfully (Living Well) and leave peacefully (Leaving Well).