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Katherine Forestier

RETIREMENT can be a frightening prospect. Without savings or planning, too many elderly people in this city, and virtually every other, live in poverty or are forced to work into their 70s and beyond.

 Those without corporate pension schemes are the most vulnerable, tending to think the government or children will provide.

 Even knowing that will not be the case, people put off saving for a stable future. The reality is, of course, that in both East and West, most will have to depend on the success of personal financial planning.

 There is nothing new in this message, which every financial consultant hammers home.

  The handsome reference volume The Lifetime Financial Plan: The Seven Ages of Financial Health (Financial Times/Pitman Publishing, HK$297), by British financial planner Jack Oliver, and the slim, more focused guide Smart Financial Planning for Your Retirement (Prentice Hall, US$10), by B.C. Ghosh of Nanyang Technological University in Singapore, are two of the latest books on this theme.

 Although much of the detail refers specifically to the financial systems of Britain and Singapore, their strategies for security are relevant to those living elsewhere, including Hong Kong.

 Oliver's Lifetime Financial Plan is just that, a reference for financial planning from the cradle to the grave. His starting point is taken from Shakespeare's As You Like It: 'All the world's a stage, and all the men and women merely players: they have their exits and their entrances; and one man in his time plays many parts, his acts being seven ages.'  Oliver addresses the financial needs of those seven ages - birth and education, work, marriage, parenthood, career development, retirement and old age - and the roles people are likely to play during each of them.

 The book will be welcomed as a reference for professionals and those seeking to plan their own finances, from students and home buyers to pensioners. It explains the options, provisions and regulations for every age, with examples and exercises to illustrate the benefits of different strategies.

 Although much of the advice is offered in the context of the British tax system, many of the financial instruments discussed are similar to ones that can be purchased here.

 Ghosh's Smart Financial Planning focuses solely on retirement - although, like Oliver's book, it should be read well before reaching that age.

  He provides an Asian perspective. A survey of Singaporeans in their late 40s to early 60s found that only 4 per cent had started planning 20 years ahead of retiring. Slightly less than half expected their children to support them - although this rose to 93 per cent for those who responded to the survey in Chinese.

 Like elsewhere in the world, the number of senior citizens in Singapore is increasing dramatically, from 10 per cent of the population at present to a projected 26 per cent by 2030. There are now eight working people for every retiree, but by 2030 there will be just 2.2. For this reason, no one can rely on the government to provide.

 Ghosh addresses the issue of living a healthy and fulfilling life in retirement. The desirability of developing leisure interests at all ages is entrenched in the Western lifestyle. In the East, however, long working hours leave little time for hobbies, which means Asians generally are ill-prepared for the day they no longer have to work.

 Ghosh advises people to plan for an active retirement. His leisure-activity grid - used to determine the interests most suitable for an individual - includes gardening, handicrafts, tai chi, voluntary work, swimming and reading.

 In Singapore, retirement planning is done in the context of that country's Central Provident Fund, a mandatory savings programme that can be used as a pension scheme, as well as to cover the cost of medical expenses, buying a home, insurance and education. Employers and employees each contribute a hefty 20 per cent of the salary package to the fund.

 CPF makes an interesting comparison with Hong Kong's Mandatory Provident Fund, which will focus just on funding retirement. CPF is a flexible, complex system members can adapt to their needs. But Ghosh says that only a minority take up investment opportunities allowed under the scheme that offer greater growth potential. His book guides Singaporeans on how to make the most of the system.

 This is, of course, of only peripheral interest to most Hong Kong readers, as are the British state provisions detailed in Oliver's book. What both books make clear is that there will be an urgent need for similar guides focused on Hong Kong as soon as the MPF is launched, in 2000.

Katherine Forestier 



How to face old age with confidence and cash