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Put Money For Retirement How To Be Comfortable
Date 02 Nov 2020 Time 08:27
Investor Thinker Column By … Bun Buonpichayakorn, Managing Director Securities Trading Business, Bualuang Securities
Put Money For Retirement How To Be Comfortable
Investor Thinker Column By … Bun Buonpichayakorn, Managing Director Securities Trading Business, Bualuang Securities
Hello investor friends, if we talk about retirement. Many people may think that it is a long way off, but this is very important, with the anticipation that 2021 Thailand will fully enter the aging society. That will have the elderly about 20% of the total population AND from the survey of the National Statistical Office
During the past, 55.8% of the elderly in Thailand still depend on others. That means More than half of the elderly in Thailand cannot live on their own money after retirement. And in the future, the proportion of older people of working age is less than the acceleration rate. This is a national problem, so it is important that we start planning our investments seriously.
How to start? Many people have questions, of course, we must have knowledge of savings. Today, I would like to talk about how to earn money for retirement.
Step 1, we need to know. To save, we must first know that what is the level of risk for you? In which the easiest way is age because age is a simple indication that how much risk should we take? Each age group has different investment styles. For example, those who start a new job have more time to work for 30-40 years before retiring, they can take risks. Can accept a lot of fluctuation To generate high returns If risky assets such as stocks fall Can wait Due to our long investment period
But if we get old, the face of the port has to change. Because when we are very old, we will not take too much risk. Because enough to retire. It was during the stock market. Assets at risk are down, we will use the money saved for retirement, the price may disappear, for example, in the last 2-3 years, who has retirement savings, such as provident funds or RMF that focus only in Thai stocks. Come in today, you may also find it difficult to sell at a low price. Many of you have to wait for Thai stocks. Top again to remember to sell So, as old age approaches retirement, the investment portfolio should focus on more stable assets. Therefore, the first element must be known first. How much risk can you accept?
Step 2 Know the assets to invest in. Investment assets are divided into 2 main parts: risk assets. And stable assets. But when I say the word risky assets, a lot of people understand that it’s just Thai stocks. But the term risk-weighted assets is still something that we can diversify into a wide variety of foreign stocks. Alternative Assets Real estate, gold and oil, which can be classified in a portfolio that we call Risky Assets But it should be in the right proportion. Do not give too much weight. And as discussed above If we focused on Thai equities only 2-3 years ago, we did not get any returns, if we expanded into foreign equities or gold, we would stabilize our portfolio. For stable assets Many people would think only of bank deposits. But in terms of investment, debt instruments, bonds and bonds of high quality, investment grade and above, are considered to represent stable assets. And it’s probably not just domestic debt. Distribution in good quality bonds AND bonds It can also help spread risk When we know that we can eliminate both stable and risky assets, the trick is to diversify to reduce risk. Because retirement is an important saving That’s why we distribute both types and countries. Both risk assets and stable assets
And what should the ratio be? From the first step, when we know that the retirement savings portfolio must be managed according to the risks that we can assume. Taking age as a set That is easy and works well With a simple classification, take 80 sets and subtract their age, for example, if you are 40 years old, the risk assets you have in your portfolio should be about 80-40 = 40 % and at the age of 50, risk assets should be 80-50. = 30%, etc. This proportion is a simple criterion that we must know in order to assume the risk according to age. However, it also depends on your investment outlook. If you think I can take many risks from 80 minus my age, it will be 90 or 100 or who can risk less, it may be 60 minus your age.
Step 3 Track and adjust your investment portfolio according to step 2, then what we need to do is adjust our retirement portfolio according to age. Which is at least a year, gradually reducing risk assets down To balance the investment portfolio with us Everyone, do not forget to keep reviewing, following and adjusting the ratio as well. Until retirement
That said, many people are increasingly interested in organizing their retirement portfolios. But there may be limitations.It’s not easy to do it yourself.
Now Bangkok Capital Asset Management (BCAP), a subsidiary of Bualuang Securities Plc., Has designed a fund. To be ideal in saving for retirement by opening an RMF that allows, in addition to saving, but also tax deductions, the division is called “BCAP Global Target Date RMF” using the principles of I described above, so It is adequate and easy to save for retirement, divided into 3 groups: BCAP2030RMF, BCAP2040RMF and BCAP2050RMF, where the figure is the year that investors will retire, if it is 2030, another 10 retirees will have a very stable asset. As for 2050, another 30 years until retirement. You will have many risky assets That each division will adjust the ratio of risk assets down until the retirement year AND both risk assets AND stable assets Properly distribute assets around the world, thus placing money for retirement. Comfortably Retired
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