Editorial | More work ahead to help retirees in Hong Kong with meagre nest eggs
- From making better use of human resources to offering better retirement protection, a holistic review of retirement planning is needed
Most people look forward to retirement at some stage. Exactly what makes a happy retirement life may differ from person to person, but few would discount financial security as one of the keys.
In our fast ageing society, where retirement and social welfare protection remains woefully inadequate, the question of how much is needed to retire resonates even more widely.
There has been no shortage of surveys and advice from wealth management companies on investing for comfortable retirement. Amid a slow and volatile post-pandemic economic recovery, the latest suggestion that many Hongkongers might have to work past retirement age in the face of a shortfall in their pension savings came as little surprise.
According to Schroders’ findings, the average Hongkonger faces a HK$2.4 million gap between their expected post-retirement expenses and the money available in their pension funds. Nearly three quarters of respondents therefore expected that they would have to work beyond the retirement age, compared to just 40 per cent in the United States.
Currently, the city’s Mandatory Provident Fund scheme has an average of HK$258,700 for each of its 4.7 million members, based on assets of HK$1.23 trillion as of May 21, according to research firm MPF Ratings. There was a 3.5 per cent gain last year, up from the losses of 15.7 per cent in 2022.
Given Hong Kong’s living standards, the savings, which cannot be touched until age 65, are hardly enough for a decent living. And even when various government welfare allowances are available for those who meet the means tests, recipients say the handouts often cannot make ends meet.