The Effect of Expected Income on Wealth Accumulation and Retirement Contribution of Thai Wageworkers

Thailand has now become the aging society. However, the fact that the majority of Thai wageworkers do not effectively save for their retirement may result in several elderly living below the poverty threshold during retirement. The objectives of this research article were to find the factors determining Thai wageworkers’ retirement contribution. Founded on the theory of life-cycle hypothesis, this article employed a sample of 300 wageworkers in the Northeast of Thailand and performed a statistical analysis using the structural equation modeling (SEM) approach using age as a moderator. The empirical results revealed that expected income, wealth accumulation, career status, and health status were the main constructs influencing an individual’s ability to contribute to his or her retirement. This article suggested that a wageworker should first contribute his or her income through wealth accumulation schemes such as investment in financial assets, for example, stocks, bonds, mutual funds, and properties, investment in other business as a second job, and simply cash deposit. The results suggested that wealth accumulation was the most important mediator allowing a wageworker to contribute to retirement effectively in the long term. This article also proposed thoughtful research implications for wageworkers, employers, and the Thai government. This article recommended that the government and authorized bodies (e.g., the Bank of Thailand and the Stock Exchange of Thailand) should provide more investment alternatives and improve investment knowledge of the citizens. This would allow the citizens to have sufficient financial knowledge to invest in riskier financial instruments that potentially give better returns such as stocks.