Earn 100, pay 90 lives. Sandwich Gen bears the burden, spreading to Gen Y.
A deep dive into the Sandwich Generation crisis: earning 100, spending 90. Examining 3 retirement planning traps for Thais, and the solutions with KKP's Better Retirement feature on the KKP Better app.
Data from reports by national agencies and research institutions clearly reveals structural pressures that are constricting the working-age population.
The extreme stress of the Sandwich family.
A report on the social situation in Thailand during the first quarter of 2567, by the National Economic and Social Development Council (NESDC), citing data from the National Statistical Office, indicates that "Sandwich" households have an average income of 39,414 baht but high expenses of 31,452 baht per month, pushing the expenditure-to-income ratio to a worrying 90.1%. Even more concerning is that 41.8% of these households have less than 20,000 baht in savings.
Hidden costs that will accumulate in the next 10 years.
The Thailand Development Research Institute (TDRI) forecasts that the total spending of senior citizens in Thailand will grow from 2.18 trillion baht in 2566 to 3.50 trillion baht in 2576 (an increase of over 60%), which will inevitably become a huge "fixed cost" that Generation Y will have to bear.
Soaring dependency ratios.
A survey of the elderly population in 2024 by the National Statistical Office indicates that the elderly dependency ratio has increased from 10.7% (1994) to 31.1% (2024). This means that for every 100 working-age people, 31 are responsible for elderly individuals. Meanwhile, the number of single elderly people has almost quadrupled. This clearly signals that managing finances for self-reliance in retirement is an urgent priority.
Systemic gaps that affect retirement plans.
Faced with heavier expense structures, data from the Bank of Thailand (Financial Literacy Survey Report 2567) reveals statistics that underscore the problem: only 14% of Thais successfully achieve their retirement planning goals. The working-age group between 31-60, the age group that should have the highest accumulated assets, is the one that hasn't started planning or is most far behind in terms of achieving their goals.
Conversely, considering data from the United States, a 2567 FINRA Foundation report indicated that 80% of those with a bachelor's degree or higher, compared to 37% without, had retirement savings accounts. This significant difference in figures is not solely due to differences in financial discipline, but may also stem from differences in the environment or support systems that make long-term planning accessible and automatic.
3 pitfalls that hinder Thai people's retirement plans.
A study of Kiatnakin Phatra Bank's customer base revealed that retirement planning challenges stem from behavioral limitations in three phases:
- A lack of a starting point (Cognitive Overload): Those wanting to plan for retirement don't know where to begin, and coupled with current financial constraints, complex financial goals for the next several decades are often dismissed and prioritized low.
- Present Bias: Some retirement planners can get started, but when emergencies or unexpected expenses arise, the liquidity that would have been used for long-term investments is often withdrawn, disrupting the continuity of the dollar-cost averaging (DCA) savings plan.
- Delayed feedback means that retirement planners with existing portfolios often don't know if their asset allocation aligns with their future inflation goals. Furthermore, simply purchasing tax-deductible funds without a comprehensive goal is usually insufficient to cover actual post-retirement expenses.
KKP: Better Retirement
Mr. Rames Sasirachapornchai, Head of Product Owner, Digital and Innovation Management Division, Kiatnakin Phatra Bank. From a financial sector perspective, we've found that the Sandwich Generation hasn't neglected retirement planning, but they mostly struggle with where to start due to a lack of simple and time-saving tools. The Better Retirement feature is therefore designed to begin with real needs, not just mathematical calculations, because we believe people plan better and are more disciplined when they have a clear picture of what kind of life they're planning for.
Retirement planning features "Better Retirement" The KKP Better application aims to enhance financial planning for sustainable solutions in an aging society, specifically targeting the "Sandwich Generation," particularly working-age Gen Y individuals facing financial strain from caring for the elderly and children. It highlights innovative financial solutions that integrate behavioral science principles to break down savings limitations and help Thais achieve their retirement goals.
According to KKP's research, the financial burden is rapidly expanding from Gen X (ages 44-59) down to Gen Y (ages 30-40), inevitably reducing the potential for long-term wealth accumulation and saving among the key population groups driving the economy.
Bridging behavioral gaps with the “Better Retirement” retirement planning feature.
- Facing national challenges in retirement planning, Kiatnakin Phatra Bank has developed the “Better Retirement” feature within the KKP Better application to address behavioral limitations at three stages. This feature utilizes technology to process financial performance data, with the following key advantages:
Start with a vision, not equations (Beginner Level): This feature transforms retirement planning from complex calculations using spreadsheets to asking questions about your desired retirement lifestyle. The system then processes this information, along with your current financial situation, to determine the actual investment amount and recommend appropriate mutual fund allocations based on your individual risk tolerance.
- Flexibility for Continued Growth (Continuity Level): Includes a continuous alert and plan tracking system, constantly calculating the amount of additional investment needed each month, and providing flexibility to adjust investment plans in case of emergencies, ensuring it aligns with actual financial situations at each stage without compromising the main goal.
- Visible results along the way (level of success assessment): Shows the progress of the investment plan through graphs, illustrating the real-time money flow and indicating where the investor stands toward their goal. This helps build motivation (feedback loop) for maintaining long-term investment consistency.
The bank expects that if the Better Retirement feature can boost the retirement planning success rate among Thais from 14% to 17%, it will effectively create financial security for over 1 million people. This would not only reduce the burden on the next generation of working-age people but also decrease reliance on government welfare budgets and help Thailand cope with an aging society more sustainably.
