Today, many Hongkongers are taking different measures to financially prepare for retirement, through the Mandatory Provident Fund (MPF) scheme, savings, and separate investments, with the aim of creating a sustainable income stream for their retirement. Research from Manulife Investment Management revealed that working Hongkongers on average will get a recurring retirement income of less than one-third of their current income when they retire. This is according to the newly launched Multigenerational households that were once a common way of life in Asia are now much more disjointed. This has taken its toll on the feasibility of familial support that older generations could rely on. In fact, only 8% of people in Asia are “saving and investing for elderly’s expenses”, the lowest in their savings and investment objectives.
However, parents in Asia are more concerned with their children’s future, with 71% saying they worry more about their children’s future financial well-being than their own retirement, and 75% of parents have started saving or investing for their children’s future financial well-being. Women in particular are more concerned with their children’s financial future, with 76% have taken action to try to secure enough savings for the next generation.
Children are commonly viewed as important potential sources of “social insurance” in old age across, but this is under threat by the declining fertility rate. The next generations must not only provide support for their retired parents but also prepare for diminished upstream familial support when they retire.
This may be especially true for DINKs (double income, no kids) in the region, with 56% of them feel they are likely to work after retirement.
In Hong Kong, the older population has been forced to modify their filial care expectations and continue working to pay for their upkeep. Over the past decade, the number of working older persons has more than doubled.
Indeed, 60% of men and 50% of women in Hong Kong expect to work after retirement.
In particular, it may be more challenging for women to achieve their retirement income goals due to:
Family responsibilities - Women tend to face the challenge of building their career and raising their family. Coupled with likelihood of reduced income after giving birth, they would have lower lifetime earnings and slower accumulation of pension benefits.
Longevity - Women are more likely to outlive their spouse. As such, 56% of women in Hong Kong said wealth accumulation is their top savings and investment objective, followed by for retirement and for personal consumption.
Gender pay gap - Female labour force participation and pay generally lag those of men. In Hong Kong, women earn 27% less than men.
The good news is that technology can help women and men better plan for and manage their retirement savings. Proprietary data from Manulife Investment Management revealed that more women than men use digital platforms to access investment information and to invest.
Source: All data sourced from an online survey commissioned by Manulife Investment Management of 2,000 people from Hong Kong, Taiwan, Indonesia, and Malaysia – 500 people from each market – who are aged 20 to 60 between 25 August and 6 September 2022. The research aims to assess people’s retirement readiness and aspirations, including savings and investments, and lifestyles and family issues they consider when planning for retirement.