AIA Hong Kong today announced the results of the “11th AIA Desired Retirement Tracker” (the “Survey”) with the following key findings:
- 66% of respondents are expected to have insufficient retirement reserves with an individual shortfall of HK$2.01 million, a record-high among all previous Surveys.
- “Saving too little, too late” is common among respondents: Respondents allocate only HK$5,289 monthly to their retirement savings or investments, 8% lower than the amount in the previous survey; 46% of respondents do not have a clear savings or investment plan for retirement and will not start doing so until they reach the age of 48 on average.
- 26% of respondents have not budgeted or have no idea how much to budget for their medical expenses after retirement.
- Respondents have a positive view of the tax deductible products: About half of respondents agree that MPF Tax Deductible Voluntary Contributions (TVC) (47%), Qualifying Deferred Annuity Policy (QDAP) (44%) and Voluntary Health Insurance Scheme (VHIS) (50%) are appealing.
- Nearly half of respondents show interest in the tax deductible products, but they are “all thought and no action”: Although 45%, 51% and 33% of respondents say they would consider purchasing TVC, QDAP and VHIS respectively, they have not taken any action.
Ms. Elaine Lau, Chief Corporate Solutions Officer of AIA Hong Kong and Macau, remarked, “Hong Kong citizens have a laissez-faire attitude towards retirement saving, and the situation is getting worse. The Survey reveals several misconceptions regarding retirement planning that have led to people. They are saving too little and too late, resulting in a record-high retirement reserve shortfall of over HK$2 million among nearly 70% of respondents. In addition, they have not prepared for post-retirement medical expenses, meaning their overall retirement plan would be affected if they are forced to draw from their retirement reserves prematurely due to health issues. Moreover, following the government's launch of the tax deductions that encourage citizens to prepare for retirement and medical needs last year, while people in Hong Kong find such products appealing, yet as high as half of respondents are ‘all thought and no action', missing out on the opportunity to enhance their retirement and medical protection.”