Introduction

Retirement can be a time of relaxation, but it can also be a time of uncertainty, as one makes the transition from the world of work to the world of leisure. Planning for your retirement isn’t easy – there’s so much to consider. Where should you start? Who should you ask for advice? What plans should you look into, investment or protection – or both?

Things to consider

– Put your health first, always: The first thing you should consider in terms of long-term planning is risk management, including critical illness cover. As you get older you are more susceptible to health issues and with no regular income in retirement, critical illness and hospitalization can severely impact your reserves.

– Set yourself a realistic goal: Consider what’s important to you and prioritise. Owning a big house on the Peak with a swimming pool is a nice dream, but may not be achievable for everyone.

– Find the right financial planner: Your financial planner will help you make some of the most important decisions in your life: how much money to save to cover your children’s education, what protection plans are right for you, and of course how to ensure a comfortable retirement. Make sure you partner with someone you trust, with a strong track record.

– Don’t forget inflation: Many people want to secure lifetime guaranteed income, which is indexed to inflation or inflation-protected, and in Hong Kong it’s very common for people to invest in real estate to achieve this – but don’t forget to keep liquid assets too. Effective cash flow management will safeguard against inflation or dips in the property market.

– Set a time frame that works for you: Work with your financial planner to set a suitable time frame you feel comfortable with and don’t over commit.

Summary

Hong Kong does not have a statutory retirement age or a well-defined pension system, so there is no clear-cut “right” way. Hong Kong’s retirement protection policies have lagged behind compared to Europe and the United States, as well as many Asian countries such as Japan, South Korea and Singapore. In other words, Hong Kong-style retirement is built on an individual sense of how to preserve their retirement capital. The reality is that ordinary Hong Kong people have to plan for their own retirement capital as early as possible through different asset management tools, from savings, retirement investment, to insurance. However, how much is sufficient to maintain your quality of life after retirement is a very personal matter as people have different standards of living and expectations as they retire.

For more interesting and useful articles, click on the links below:

• Top 5 Tips To Boost Your Retirement Income

Additional Information Resources

Additional information resources are available by clicking on the links below:

• Financial Planning
• Investments 
• Insurance 
• Pensions
• Tools & Calculators
• News

You can also view information related to your particular stage of life:

• Starting Out
• Growing Responsibility
• Nearing Retirement
• Retired