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20 Jul 2023

In the Chinese culture, the older generation tends to rely on their children to support them after they retire. However, nowadays Hong Kong people life expectancy has increased to older than 80 years old. You can imagine the challenges your children will bear if you just solely depend on them on economic support. 

1. Older workers worry about the insufficient retirement fund

According to the annual Global Sentiment Survey1 conducted by Fidelity International across 17 regions, the latest figures indicate that “Preparations for later life” and “Being financially comfortable in retirement ” are primary financial goals for 90% of Hong Kong respondents. However, 40% of them expressed that they have no confidence in achieving these goals.

Meanwhile, 45% of older workers* are anxious about using up their retirement savings too soon and 23% are worried about the inability to generate income after retirement. As a result, over a quarter of respondents aged 50 and above anticipate deferring their retirement, with nearly half of them explaining insufficient retirement savings as the main reason.

The survey also reveals that a number of older workers lower their budget for retirement spending, with 30% expecting retirement expenditures to only account for 26% to 50% of their pre-retirement income. To ensure a stable of retirement income, 15% of individuals express their willingness to continue work even after retirement.

To prevent facing a shortage of resources after retirement, workers should commence saving for retirement at the soonest.

2. Saving 20% of income for retirement

Fidelity's Retirement Savings Guidelines2 suggest that Hong Kongers should save 20% of pre-tax pre-retirement income starting from 25 years old. Fidelity estimates that you need to have 12 times pre-retirement income savings by age 65. That 12 times goal may seem ambitious.But you have many years to achieve it. It is recommended to have at least 2 times pre-retirement income by ag 30, 5 times by age 40, 8 times by age 50 and 11 times by age 60.   

3. 1% Power of Small Amounts

If you have difficulty saving 20% right now, try to commit to an additional 1% contribution into your workplace pensions scheme. 1% of your income sounds small but the benefits of compounding over 20 or 30 years could may make a significant difference in the size of your pension pot when you retire. 

Want to know how much of an impact a 1% increase in savings or workplace pension can make for you? Use our interactive calculator. See how a small change can make a big difference.

Indeed, 1% is just a start. The more you can save, the better. Whether it's 1%, 3% or 5% extra, the additional money saved today could make a big difference when it comes to helping you achieve the retirement you want.

1 The Fidelity Global Sentiment Survey was conducted in 2022, with responses from 20,000 workers across 17 regions.

2 Fidelity Retirement Savings Guidelines is based on four key metrics - savings milestones, savings rate, income replacement rate and probable sustainable withdrawal rate. Fidelity Retirement Savings Guidelines suggest that people in Hong Kong should save 12 times their annual income by the age of 65 and save at least 20% of pre-tax income in order to maintain their current lifestyle in retirement. The Fidelity Retirement Savings Guidelines are for reference only and certain assumptions are applied.

* Younger workers, aged 20-38; Middle-aged workers, aged 39-54; Older workers, aged 55≥


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