Developing an index for measuring retirement readiness in Thailand: the national retirement readiness Index

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Anirut Pisedtasalasai
Roongkiat Ratanabanchuen
Pornanong Budsaratragoon
Ruttachai Seelajaroen
Narongrid Asavaroungpipop
Tanawit Sae-Sue


Many countries are facing challenges regarding the inclusiveness and sustainability of pension systems, including Thailand. With increasing life expectancy, both the government and people need to efficiently manage their financial situations and plan for their retirement. To achieve this goal, a benchmark for measuring the state of retirement readiness is imperative but is lacking in Thailand. Thus, this study aimed to develop a framework to construct the National Retirement Readiness Index (NRRI) for the country. The developed NRRI was based on “Financial Retirement Readiness Index (F-RRI)” and “Quality of Life Retirement Readiness Index (Q-RRI)”. The F-RRI and Q-RRI were constructed separately from their four respective sub-dimensions, including State of Financial (or Health) Adequacy, Financial (or Health) Preparedness, Employer (or Institution) Enabler and Financial (or Health) Literacy. Scores from each dimension were computed from questionnaires by surveying working individuals aged 18-59 years from the government sector (G1), private sector who registered for provident funds or the government’s social security fund (G2), and low-income individuals who registered in the government welfare program (G3). The scores from the sub-dimensions were then aggregated using Principal Component Analysis (PCA) and used to calculate the NRRI. Results showed that G2 received the highest averaged NRRI score and ranged in high retirement readiness threshold. Government employees (G1) also performed well with averaged NRRI score slightly lower than that of the private sector employee group. However, G3 was the most vulnerable to retirement. Thus, retirement policies targeting this group are urgently needed. The NRRI allows working individuals to compare their scores to the national ones, thus identifying their state of retirement readiness. Furthermore, the index provides useful information for policy makers to design effective retirement programs that can prepare individuals for a happy retirement.


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