According to data from the SAR government's Census and Statistics Department, as of 2023, individuals aged 65 or above already account for one-fifth of Hong Kong's total population. The average life expectancy for men and women has reached 83 and 88 years, respectively. It is projected that by 2046, the proportion of Hong Kong's population aged 65 and above will increase to 36%.
Facing the possibility of retirement lasting up to 30 years, the traditional model of complete retirement is being challenged. The "Quality of Life Report 2025" released yesterday (Sept. 22) by HSBC reveals that 47% of affluent investors are planning for "micro-retirement," which involves taking phased breaks before fully retiring, with the preferred age to start this life "halftime" being 49.
The bank previously surveyed over 1,000 affluent investors in Hong Kong, defined as individuals with investable assets between US$100,000 and US$2 million. The survey found that among the 47% of respondents intending to pursue "micro-retirement," most (46%) plan to do so 2 to 3 times, and stated that the ideal age for the first break is 49. Furthermore, Hong Kong respondents considered the ideal duration for a "micro-retirement" to be 6 to 12 months (31%), while the majority (40%) of respondents plan to spend up to HK$785,000 per "micro-retirement" episode.
"Micro-retirement" expenses primarily supported by investment income
The survey also found that the main motivations for "micro-retirement" among respondents were spending quality time with family (34%), being able to travel and explore without worries (31%), and focusing on personal physical and mental health (30%). Regarding funding "micro-retirement" expenses, respondents indicated they would primarily rely on dividends, interest income, and capital gains (51%), followed by personal savings (42%). Additionally, the top three most popular destinations for "micro-retirement" among Hong Kong respondents were the Mainland (37%), Japan (23%), and Taiwan (22%).
However, a survey released on the same day by Sun Life Financial Asia sounded an alarm. The survey found that long-term financial planning is significantly lacking among Hong Kong's Generation X (respondents aged 43 to 58) and Baby Boomers (respondents aged 59 or above). More than half (54%) have only made short-term financial arrangements covering one year or less, and fewer than one in ten (9%) have made long-term plans for 10 years or more. Among the top financial priorities for the next 12 months, covering daily expenses (60%) ranked much higher than saving for retirement (32%), with the latter only ranking fourth. This reflects that most citizens have not yet fully realized the importance of retirement planning.
Furthermore, 55% of respondents described themselves as conservative investors. A high proportion, 91% of respondents, reported feeling pressure from inflation, and nearly half (45%) said inflation significantly affects their ability to cover daily expenses. This indicates a substantial gap in future retirement financial planning for Hong Kong's pre-retirees and retirees. The uncertainty surrounding retirement life could also directly impact their quality of life.
Daisy Tsang, Chief Executive Officer of HSBC Life Hong Kong, stated that the forms of retirement are constantly evolving. Instead of waiting until retirement age to retire completely, more people are choosing to implement retirement plans in phases. These emerging retirement styles require support from flexible financial plans to be realized.
Stable returns
The Hong Kong Academy of Finance's research arm, the Hong Kong Institute for Monetary and Financial Research (HKIMR), previously conducted two surveys and yesterday published an applied financial research report.
According to the introduction, the report covers two surveys. Survey 1 was conducted in collaboration with the Investor and Financial Education Council and covered 1,052 Hong Kong residents aged between 18 and 79 to understand their views on long-term investment decisions. Survey 2 was conducted in collaboration with a consultancy firm and covered 46 Hong Kong institutions, including major financial institutions and fintech companies, aiming to understand product development, distribution strategies, and technology applications related to long-term investment.
67% of respondents prefer retirement fund plans
The results of Survey 1 indicated that 72% of residents reported using digital financial services in the past year. Regarding long-term financial goals, the top priorities for respondent residents were stable returns (66%), maintaining their current standard of living (60%), and saving for retirement and medical expenses (60%).
Among different financial products, 67% of residents preferred retirement fund plans, while 50% chose various types of insurance products. Additionally, a high 91% of respondents stated that they rely on the advice of friends, family, or acquaintances when deciding whether to purchase financial products, with only 54% seeking guidance from financial professionals.
High demand for products offering stable cash flow withdrawals
The results of Survey 2 indicated that 70% of respondent market participants said they are currently, or plan to, distribute long-term financial products through mobile and online platforms. Furthermore, 40% of respondents plan to adopt cutting-edge technologies, such as robo-advisors and analytical tools, within the next three to five years. On the other hand, 67% of respondent institutions believe the market needs more product options with wealth withdrawal functions, for example, products that convert assets into a stable lifelong cash flow, to meet customer demand for long-term financial planning.
Regarding the above survey results, the report suggests that financial education and precisely targeted marketing measures are crucial for enhancing participation in long-term investing. The focus should be on meeting needs during the withdrawal phase and promoting long-term financial planning.
Enoch Fung, Chief Executive Officer (CEO) of the AoF and the Executive Director of the HKIMR, stated that given the ongoing trend of population aging, long-term investing is an urgent priority. He expressed hope that the report's research findings will assist market participants in addressing the challenges they face.
(Source: Wen Wei Po; Journalist: Chris; English Editor: Darius)
Related News:
Comment