Introduction
The recent survey conducted by BOC Group Life Assurance and Golden Age Foundation has shed crucial light on the post-retirement incomes of residents in Hong Kong. On average, Hongkongers stand to receive around HK$12,000 per month after retiring, usually around the age of 62. This report delves into the details of this survey, exploring its ramifications for society, retirement planning, government policies, and more.
Overview of the Findings
The incomes of retirees in Hong Kong fall short by HK$5,000 (US$641) on average per month. This income, largely derived from investments, was 60% below their average pre-retirement income of around HK$30,000.
The survey, which polled 1,000 individuals at the end of the previous year, showed the typical retiree needing HK$17,000 per month, thus indicating a deficit of HK$5,000. The survey’s goal is to inspire collaboration to develop elderly care and make Hong Kong an age-friendly city, as noted by Wilson Tang Chee-ping, BOC Life’s CEO.
The Impending “Super-Ageing Society”
Hong Kong is swiftly moving towards becoming a “super-ageing society.” By next year, over 21% of its population will be aged 65 or above. By 2050, four out of ten Hongkongers will be 65 or older, as projected by the United Nations. The city’s life expectancy reached 84.9 years in 2019, the world’s highest, translating to an expected post-retirement life of 20 years on average.
Challenges and Potential Solutions
1. Working Longer and Planning Early: To offset the shortfall, people must consider extending their working life and initiating retirement planning earlier, according to Robert Lee Wai-wang, a lawmaker for the financial services sector.
2. Living Outside Hong Kong: Consideration of residing in other cities within the Greater Bay Area upon retirement is another solution, as it offers a lower cost of living with proximity to Hong Kong.
3. Investment in Diverse Channels: The current Mandatory Provident Fund (MPF), which stood at HK$1.112 trillion at the end of June, covers 4.7 million members. However, on average, each member has only HK$236,800, sufficient to cover the shortfall for just four years. Investments in stocks, bonds, property, and annuity can ensure stable post-retirement income, as stated by Gordon Tsui Luen-on, director of the Hong Kong Securities and Investment Institute.
4. Comprehensive Retirement Protection: The MPF Schemes Authority (MPFA), the city’s pensions regulator, emphasized that the MPF is merely one pillar of retirement protection. A complete system must include voluntary savings, family support, government housing, and health policies.
5. Voluntary Contributions: The MPFA encouraged working individuals to enhance retirement reserves through voluntary contributions, with HK$8.59 billion in tax-deductible voluntary contributions recorded as of March this year.
Health Concerns Among the Elderly
The BOC Life survey found that over 80% of elderly respondents were anxious that medical expenses and inflation might deplete their assets. The next 10 years’ changing physical conditions, costly private healthcare, and the risk of severe illness were named by over 70% as their most significant concerns.
Conclusion and Recommendations
The findings from the BOC Group Life Assurance and Golden Age Foundation survey on Hong Kong’s post-retirement incomes raise several critical issues:
- Policy Development: Government must focus on implementing comprehensive retirement protection that includes multiple pillars.
- Education and Awareness: There needs to be a concerted effort in educating the population about retirement planning and encouraging investment in various channels.
- Economic Considerations: Consideration for cost-effective living post-retirement should be given, including potential relocation to more affordable regions.
- Healthcare: Access to affordable healthcare services for retirees needs to be prioritized.
- Monitoring and Ongoing Research: Continuous assessment and studies like this survey are vital for keeping abreast of changes and evolving needs.
The transition to a super-aged society is underway, and the time for concerted social efforts is now. Through collaboration and strategic planning, Hong Kong can aspire to become a city that not only cares for its elderly but empowers them to enjoy their golden years with financial security and dignity.
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