Nowadays, the younger generation dreams of early retirement. To put it simply, they do not want to work until they are 60 years old because they want more freedom to live their lives. Despite everybody dreams of a wonderful life after retirement, from the survey by Bank of Thailand in 2017, only 25% of Thai people are able to plan their savings for retirement and achieve their plan. This means only 25 in 100 people are able to make their dreams come true and another 75 are not able to retire just yet.

Many plan their retirement beautifully, but, in reality, they are so far from succeeding. The main reason is that they lack good planning such as they still do not know the exact age of their retirement, do not know the lifestyle they want to have after retirement and most importantly, they do not know how much they need to prepare for retirement.

Do remember that retirement means no regular job and no regular income. However, daily life goes on. The longer you live, the more money you need. Therefore, if you want to retire smoothly with financial stability, you really need good planning and these are the signs that you can retire.

1.Sufficient Money
 

Even though nobody knows the amount of money they need after retirement, this sum has to be figured out, so that you can prepare the money enough to use until your last breath. In reality, this amount of money can be calculated. You just have to know your monthly expenses and the number of years that you will be alive after retirement.

You have to begin by estimating monthly expenses after retirement. Nowadays, the appropriate rate of after retirement expenses is at about 70 – 80% of monthly expenses before retirement. For example, before retiring, you spend about 18 000 baht per month. Your monthly expense after retirement will be around 12 600 – 14 400 baht (150 000 – 173 000 baht per year).

After that, you can predict how long you will live after retirement which can be referred to as your family members’ lifespan. For example, you are retired at the age of 60 and could live up to 85 years old. This means you will live another 25 years after retirement. You will then bring 173 000 multiplies by 25 which give the result of 4 325 000. This means you will need to save at least 4 325 000 baht before retirement.

2. Clear All Debts

If life after retirement is still full of debt or some create debt just before retirement as they did in their 30s, they have to keep some retirement money to pay debts. Of course, this would affect your life savings and cause it to run out.

Thus, an important sign that you can retire is to be cleared of all debts, especially debts with high interest such as credit cards, cash cards, cars, or housing. These debts require a long period of installment and many are not able to clear their debts before retirement. The best way would be to clear debts as many as possible.

3. Retirement Rehearsal –Try to Spend Like a Retiree
 

An easy technique to know how much you will spend after retirement is to try spending like a retiree. To get the closest result, you will have to do one month's spending rehearsal such as lesser shopping, lesser use of credit card, stop buying unnecessary goods, stop eating out, etc. Apart from that, you should try living like a retiree in other aspects of your lifestyle such as leisure, traveling, etc. The rehearsal will let you know roughly how much you will spend after retirement. You can use that amount to determine if you have saved enough for your retired self and if it is not enough, how much more you will need to save.

Also, you should not forget that the cost of living is increasing gradually, so you have to include inflation to roughly determine the value of money today to the value in the future. For example, you are 35 years old today and you want to have 6 million baht in your savings for your retirement at 60 years old. Assuming the inflation is at an average of 3% per year. This means 6 million baht of today will only value 2 865 633 baht when you are 60 (or in 25 year time) or, in other words, if you want to have 6 million baht for your retiree self, you will need to save 12 600 000 baht.

4. Suitable Life Insurance Plan

Annuity insurance is the type of insurance that not many Thai people pay attention to because it requires one to pay insurance premiums for a long period of time and they will only get the money when they are retired. However, everybody should get annuity insurance as its goal is to manage retirement with the insured receiving return money or capitals from the insurance company that will be paid as annuity money in the same amount every year from the moment of retirement (e.g. age of 55 or 60 years old) to the age of paying benefit (e.g. 85 or 90 years old). Therefore, if you get annuity insurance from the time you have a regular income, it can be guaranteed that you will get annuity money every year.
 

5. Clear Plan of Where to Stay and What to Do After Retirement
 

Nowadays, each city has a different cost of living. The cost of living will be higher in those big cities that are important business districts. Thus, if you have a clear idea of where you will be spending your retirement life, you will be able to do basic financial planning for your retirement. This means that you can also decide the suitable amount you will spend and a suitable retirement lifestyle. Moreover, if you have a clear goal of what you want to do after retirement, the retirement financial plan could go smoothly. For example, you plan to have backyard plants during your retirement days. You will have to prepare money and plots of land and grow those plants before retiring etc.

Retirement planning is simple and everyone can do. You just have to start it right. After that, you need to follow the plan. If there is a mistake, fix it. As long as you can do this, your retirement life will be perfect.