Envision your ideal retirement life
Many of us have a sense of insecurity when it comes to our retirement because the weak global economy has shaken people's confidence in retirement planning. Our increasing longevity is also an issue because money required after retirement has to stretch further than ever before. In general, Hong Kong people have longer life expectancy comparatively. Hong Kong was on top of the global life expectancy rankings in 2011, according to Japan's Ministry of Health, Labor and Welfare. For Hong Kong, life expectancy at birth in 2011 for females was 86.7 years, while for males it was 80.5 years1.
Taking into account the normal retirement age of somewhere between 60-65 years old, people have to accumulate retirement wealth sufficient to support 20 years or more of life. Such a target is attainable but it involves several important personal financial management concepts:
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Start your financial plan early
"Compound interest effect" is the key to investment and savings. The sooner you start and the longer the period of accumulated savings, the effect of the compound interest will be more beneficial. It may help to achieve your investment objectives and increase your retirement reserves. -
Do not invest your entire savings in the stock market
Stock is a popular investment but it comes with a high risk. The stock market has been on a rollercoaster ride in recent years that has had a tremendous impact on expected returns. The primary aim of retirement wealth accumulation is to grow your investment without too much risk to your capital. An optimal financial plan has to include different investment instruments that maintain a balance between risk and return. -
Do not have unrealistic expectations
Bear in mind that retirement savings are a long-term investment. Pursuit of unrealistically high return rates over a short period of time can be dangerous. It will put your capital in a risky situation and may ultimately ruin your entire retirement plan.
There are different kinds of retirement planning services available in Hong Kong that aim to provide you the protections you need. An ideal retirement is not a pipe dream. In the following articles, we will share with you how to plan well for your retirement, particularly in Hong Kong.
1Japanese women fall to No. 2 in life expectancy, 2012-07-27, CBSNEWS, http://www.cbsnews.com/8301-205_162-57481667/japanese-women-fall-to-no-2-in-life-expectancy/
Source: King Content Pty Ltd.
Prudential Hong Kong Limited (A member of Prudential plc group)
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