You have just received your first paycheque. Yippee! But when you look at your bank statement online, the amount you earned is slightly lower than the one your boss told you. What's going on? The difference is due to your MPF contribution. But, you are still young, why should you save for retirement so early? The sooner you save, even little amounts, the easier it will be to accumulate enough savings for the day you retire. Why? Because the amount you save will grow, either through interest or by capital gains. The amount you save for retirement, in the MPF scheme for example, is constantly reinvested, so it keeps growing. Do you remember compound interest? (See our previous article on interest.) In many countries, retirement has become a serious issue. Over the past decades, life expectancy has increased so that people live 20 to 30 years or more after they stop working and earning their living. Besides, the birth rates have declined, so there are relatively fewer people working, while the greying population is increasing. Hong Kong is no exception: there are roughly six people working for every person over 65 years old at the moment. In 30 years, this ratio could drop to two! This is why the Hong Kong government set up the MPF system in 2000.