Saving for Retirement Through Retirement Mutual Funds (RMFs)

Abstract

Thai society is becoming an aging society. In 2030, Thailand’s population aged 60 years old will rise to 25.12 percent, which will make the country fully an aging society. The personal savings rate to income before purchase is down from 10.7 percent in 2007 to 8.3 percent in the year 2013. Therefore, those in the working age group should plan to have enough savings to live happily after retirement. One option that can be considered as an effective saving plan for retirement is the saving through investment in Retirement Mutual Funds. In 2015, the Revenue Department issued an announcement to adjust the definition of the base amount that is used for determining the maximum amount of Retirement Mutual Funds that a taxpayer can buy and be deductible from his taxable income. An old law is “the tax exemption for money as was paid in the purchase of units in the Retirement Mutual Funds not exceeding 15% of his annual assessable income in that tax year”, while a new law is “the tax exemption for money as was paid in the purchase of units in the Retirement Mutual Funds not exceeding 15% of his annual assessable income which is taxable in that tax year.” Although the new law will result in a tax for a taxpayer who buys Retirement Mutual Funds which as a whole has increased, however, taxpayers who buy Retirement Mutual Funds will get a tax break not avaiable to those who do not buy Retirement Mutual Funds.