Tips To Plan For Retirement Security In Hong Kong
Retirement security in Hong Kong is not as established as we would like it to be. According to an article published in China Daily, Hong Kong is in 24th place among the 97 regions that were ranked according to their ability to provide the elderly with a great retirement life.
Most of the retired individuals are relying on the benefits provided by the government to help them survive. But we all know that any benefit that you will get, even in the richest of nations, will not be enough to give you the retirement you deserve.
This is why you need to do your own share when it comes to preparing for retirement. It is important for you to have your own retirement savings to boost your financial position when you retire.
The article from China Daily also revealed that the elderly in Hong Kong are more likely to face poverty problems. If you want to steer clear of the statistics, you need to work on your retirement security immediately.
How to make your retirement financially secure
According to the date provided on Gov.hk, a lot of the elderly are still a part of the workforce. Of those between the ages of 55 to 64, 68.8% of males and 37.5% of females are still working. There are also those who are 65 and above and yet are still working – 14.3% of the male and 3.7% of the female are working. All in all, there are 667,010 workers in the age group of 55 and above.
It can be safely assumed that these people are still working because they lack the retirement security that will allow them to stop working and enjoy senior living. If you do not want this to be your problem in the future, here are some tips that will help you secure your retirement in Hong Kong.
- Analyse your current finances.
Check if you have adequate savings – or if you have anything at all. If not, the analysis of your finances will help identify your starting point. Your current financial position is important as you start the retirement planning process.
- Decide on your target retirement age.
Do you want to retire when you are in your 60s? Or is it okay with you to retire when you reach the age of 65? Having a target age in mind will influence a lot of factors about your retirement.
- Know how much you will need.
There are many factors to be considered when you are trying to determine your retirement fund target. These include your health to determine how long you are expected to live. It also includes your target retirement age. You should also consider the quality of life that you want to live and the inflation rate that will definitely increase the cost of living by the time you retire.
- Calculate your monthly contribution.
When you know your target retirement age and fund, you can calculate how much you need to contribute each month.
- Create a budget.
After calculating the ideal monthly contribution, you need to create a new budget that will include this in your financial obligations. If there is no more room in your budget, you need to make room for it. Whether that means you should earn more or spend less – that is up to you.
- Research the options where you can place your savings.
Ideally, you want to take advantage of compound interest. This refers to the interest that is calculated on the principal amount and the interest that was capitalized on the deposit. Since both the principal and interest amount are used to calculate the gains, the deposit will grow at a faster rate.
Investing is a great option to put your money where it can earn you some income through compound interest. You should also consider the various retirement schemes offered by employers: Occupational retirement Schemes, Mandatory Provident Fund Scheme, and the Long Service Payment.
- Monitor your progress.
Finally, you need to monitor your progress. Check how much your money is growing every now then to make sure you are on track. You can make changes as you go along. If you can increase your contributions or shift into another retirement scheme – that will depend on your current financial situation.
Other ways you can secure your retirement
Apart from the financial aspect, there are other ways that you can ensure your retirement security. Here are some other considerations when you are working on securing your retirement life.
- Keep yourself healthy.
Most of the time, retired individuals spend most of their money on health care. Although there is an option to get free healthcare in Hong Kong, it may not be enough if you contract a serious illness. To keep your health from eating too much of your retirement fund, you need to stay as healthy as you possibly can.
- Be wise about your lifestyle choices.
You deserve to live the best quality of life when you retire. However, you need to be realistic as well. You have to consider the type of lifestyle that you can lead depending on what your retirement fund can afford.
Do not work yourself to death trying to save up for an expensive retirement life. You may not live long enough to see it happen. It is best to just aim for a simple life so you can ensure that you will not outlive your retirement fund.
- Lower your debts.
Finally, you have to do something about your debts. If you know that your retirement money will not be enough, you need to make sure you will not share it with your debt payments. Make smart decisions about your debts and keep it as low as you possibly can.
Retirement security is not that hard to accomplish but it does take a good amount of self-control and financial discipline. Just make sure that you do not forget to live for the moment. A good balance of living at the moment and for the future should help you secure a great retirement without compromising the overall quality of your life.
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