Even though the current economic crisis has somewhat cooled down, it continues to impact the economy significantly. In the long run, the continuous increase in inflation may make it difficult to predict if the money we have saved for retirement will be enough. Today, we need to plan our finances for the future when inflation rises, with 'retirement insurance' to ensure a happy life without worries during retirement.

If anyone still can't figure out how inflation affects the elderly to what extent before we see financial planning with retirement insurance, we would like to see the impact of inflation that affects the elderly today first.

How does inflation currently affect the elderly?

Inflation causes people in every age group to borrow more to strengthen their financial flexibility. This is done through personal loans and credit card debt because they are easily accessible debts with little collateral required. In 2022, the 50-59 age group had the highest amount of this type of debt, totalling 7.8 trillion baht.

In addition, in the same year, the 50-59 age group and the 60-year-old and above age group also had other debts or credits for agriculture, business loans, motorcycle hire-purchase loans, and unclassified loans up to 42.2%.

With increasing inflation causing the elderly to have more debts, it reflects well that the current income may not be sufficient to cover rising expenses. In the future, this inflation will also impact our finances when we become elderly.

How will inflation affect the elderly in the future?

-          Inflation makes the cost of living higher in retirement age

Inflation has been around 4% over the past 10 years. Currently, a plate of food starts at 40 baht. In another 20 years, it is possible that it could reach 90 baht per plate. Everything becomes twice as expensive. With inflation causing the cost of goods to rise like this, the money we have saved may need more to cover expenses.

-             Inflation makes healthcare costs more expensive

As we age, our bodies become weaker and more prone to health issues, increasing healthcare expenses. Higher inflation rates can result in healthcare costs rising by approximately 5-8% annually. Elderly individuals may incur average hospitalisation costs of over 30,000 baht, significantly higher than younger individuals.

The impact of inflation on the elderly in the future is a matter of great concern. Therefore, we would like to take everyone to look at the factors affecting economic trends and inflation in the future.

Economic trends and inflation in the future

The increasing global inflation rate results from imbalances between supply and demand. The future trend of inflation, whether high or low, may be uncertain due to the following factors.

●        Export growth, manufacturing expansion, and recovery in the tourism sector drove the global economic recovery. If recovery and balance are achieved, future inflation could be reduced.

●        Impacts from the conflicts in the Middle East region are the primary location of major oil-producing countries, leading to continuous oil price spikes affecting production and global exports. If the situation in the Middle East conflicts does not improve, it may increase the risk of rising inflation.

●        The intensification of the El Niño phenomenon is a natural phenomenon that is difficult to avoid and impacts various industries, causing higher prices for goods and affecting production and exports. If the world does not adjust to the El Niño phenomenon, such as purchasing raw materials in advance, having reserve raw material sources, using alternative energy sources, and using alternative raw materials, there may be a risk of high inflation.

●        Impacts from state policies such as livelihood assistance measures or economic stimulus projects. In 2024 and 2025, the inflation rate is expected to increase by 2.0% and 1.9%, respectively. When combined with the effects of digital wallet projects, the general and introductory inflation rates in 2024 may be at 2.2% and 1.5%, respectively.

After we have seen how inflation affects the elderly, we would like to invite everyone to plan their finances for retirement with ‘Retirement Insurance’.

Planning for retirement with retirement insurance or life insurance with retirement benefits.

It is a life insurance policy focusing on saving money, similar to a life insurance policy with savings. The insured must pay the insurance premiums for a period as specified in the life insurance policy, which is made continuously until retirement age. The insured will receive a refund in the form of a pension, which retirement insurance has many advantages and benefits suitable for financial planning for use in retirement age.

●        Low Risk - Retirement insurance works similarly to depositing savings into an account each month for a specified period. The returns will be in retirement funds distributed monthly upon retirement age, ensuring that the principal amount paid remains intact. It also provides life coverage from the contract’s start, making this insurance type inherently low-risk.

●        Tax Saving - Retirement insurance helps us reduce our tax payments by providing coverage for at least 10 years. It can be used to deduct taxes at a rate of 15%, up to a maximum of 200,000 baht. Combined with other retirement savings tax deductions, the total amount should be at most 500,000 baht.

●        Clear Return on Investment Guarantee - Retirement insurance lets you specify the retirement funds you need from the contract’s start, ensuring return clarity. It can meet post-retirement income needs, making life planning easier, reducing expenses, and alleviating post-retirement worries.

●        Enhanced Health Protection Planning Assistance - Most retirees stop paying health insurance premiums due to increasing costs. However, post-retirement expenses often go towards healthcare. Continuous health insurance coverage is desired, so having retirement insurance that pays back funds post-retirement can be used for health insurance premiums or personal care needs in retirement.

However, retirement insurance is one option for those who want to create a sense of security. If something unfortunate happens and we want to receive guaranteed compensation to use on the day of retirement to ease our financial burden and live a happy retired life, this type of insurance does not guarantee that the returns will be able to beat inflation.

Planning for retirement should be done in conjunction with other savings and investment methods for the best outcome.