Savings & retirement

Expats who intend to stay long term face a question people who never left home do not: if your retirement savings sit entirely in another currency but every cost you will face is in baht, you are exposed to an exchange rate you cannot influence, on expenses you cannot avoid.

This is not a prediction about the baht. It is about mismatch. A 15% currency move is a rounding error when you are earning; it is a material change to your standard of living when you are drawing down a fixed pot and cannot go back to work.

Holding part of your long-term savings in the currency you will actually spend removes that specific risk. How large a part depends on how confident you are about staying, whether you have a home-country pension, and what you would do if plans changed — which is exactly the conversation to have with an advisor rather than a product page.

The plans here do three different jobs. An endowment sets out its benefits in a schedule from day one: you know the number at the finish line, which suits goals that cannot be missed. A unit-linked policy invests in funds you choose, offering more growth potential and no guarantees. An annuity converts savings into a regular income for life, which answers the one risk a lump sum cannot — outliving your money.

Two cautions apply to all of them. First, these products reward being held to maturity; surrendering in the early years typically returns less than you paid in, which is the structure working as designed rather than a penalty. Second, and specific to expats: plans change. Before committing to a long contract, think honestly about the probability you will still be in Thailand in ten years, and size the commitment accordingly.

Keep an emergency fund of three to six months of expenses in an accessible bank account regardless. Nothing in this section should be the money you might need next year.

One more point worth knowing: if you are a Thai taxpayer, premiums on qualifying life and annuity policies attract deductions under Revenue Department rules, and annuity policies have their own separate allowance. Whether that applies to you depends on your tax residency — check with a tax adviser in both countries before restructuring anything substantial.