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Retirement Budget: How Much Do Hong Kong People Need to Retire?

7-min read

Updated on 2026-2-27

Author：AIA Content Editorial Team

What kind of retirement life do you hope to enjoy? Travelling the world, indulging in gourmet food, or living a simple and low-key lifestyle at home?

After years of hard work, most professionals naturally wish for a comfortable and worry-free retirement. But how much money do Hong Kong people actually need for retirement? The answer differs from person to person. Nevertheless, understanding your retirement budget early and accurately is the foundation of effective retirement planning in Hong Kong and plays a crucial role in building a secure retirement in Hong Kong. This article explains how to calculate retirement living expenses in Hong Kong. It provides a practical guide to retirement planning, including how to use a retirement calculator to estimate your retirement budget more precisely.

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Hong Kong's Long Life Expectancy Makes Retirement Budgeting Essential

When calculating a realistic retirement budget, the first step in retirement planning Hong Kong is understanding how many years you may spend in retirement. According to data from the Census and Statistics Department, the average life expectancy is 83 years for men and 88 years for women¹.

Hong Kong does not have a statutory retirement age, and most professionals retire between the ages of 60 and 65. The 16th edition of the "AIA Desired Retirement Tracker" (the survey) found that the average ideal retirement age among Hong Kong people is 62.2². This means retirees must be prepared to live for more than 20 years without a stable salary income, making long-term retirement planning and accurate retirement budgeting essential.

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Inflation Significantly Increases Hong Kong Retirement Living Costs

Inflation is a major threat to savings and plays a critical role in shaping a sustainable retirement budget. According to the latest government budget forecast, the average inflation rate between 2026 and 2029 is expected to be around 2.5% per year³.While this may appear modest, long-term inflation can substantially increase retirement living costs and financial pressure.

For example, over 25 years of continuous 2.5% inflation, everyday expenses such as food, clothing, medical fees, and housing-related costs can nearly double.

Item	Current Price (HK$)	Price After 25 Years at 2.5% Inflation (HK$)
Cup of coffee	40	74
8-kg bag of rice	110	204
Jeans from a chain clothing store	220	408
Private hospital general ward fee (per night)	1,000	1,854
Monthly residential management fee	2,000	3,708

These examples illustrate how inflation steadily erodes purchasing power over time. Effective retirement planning must therefore focus not only on saving, but also on asset growth to protect your retirement budget over time.

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Significant Differences in Retirement Costs Between Homeowners and Renters

Housing costs in Hong Kong are extremely high and have a direct impact on retirement planning. Whether a retiree owns a fully paid property or relies on rental housing can significantly affect their retirement budget and overall Hong Kong retirement strategy.

According to data from the Rating and Valuation Department, the average monthly rents in July 2025 for residential properties measuring between 40 and 69.9 square metres (approximately 431 to 752 square feet) across different districts in Hong Kong were as follows⁴:

Hong Kong Island: HK$408 per square metre (HK$37.90 per square foot)
Kowloon: HK$366 per square metre (HK$34.00 per square foot)
New Territories: HK$282 per square metre (HK$26.20 per square foot)

In simple terms, a 500-square-foot apartment would cost around HK$18,952 on Hong Kong Island, HK$17,001 in Kowloon, and HK$13,099 in the New Territories.

Estimated Monthly Living Expenses for Hong Kong Retirement

Housing Type / Lifestyle	Ideal Lifestyle (Comfortable)	Data Reference
Private property (fully paid)	Approximately HK$16,304**	Median monthly living expenses from the AIA survey
Renting (New Territories)	Approximately HK$29,403	Living expenses HK$16,304 + rent HK$13,099***
Renting (Kowloon)	Approximately HK$33,305	Living expenses HK$16,304 + rent HK$17,001***
Renting (Hong Kong Island)	Approximately HK$35,256	Living expenses HK$16,304 + rent HK$18,952***

^{**Note 1: Middle-class living expenses are based on the latest AIA Desired Retirement Tracker (the survey), with a median monthly living cost of HK$16,304.

***Note 2: Rental budgets are updated using July 2025 data from the Rating and Valuation Department, reflecting average rents in the New Territories (HK$13,099), Kowloon (HK$17,001), and Hong Kong Island (HK$18,952).}

In terms of miscellaneous expenses, renters may not need to pay management fees or government rates. However, they may need to relocate every few years, incurring moving costs and real estate agency commissions. As a result, long-term housing costs for renters may be higher than those for homeowners. This is an important factor to consider when estimating a realistic retirement budget as part of retirement planning in Hong Kong.

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Daily Living Expenses Vary, but Illness Affects Everyone Equally

Once housing costs are addressed, daily expenses such as clothing, food, and transportation vary depending on personal lifestyle choices. Whether you pursue a minimalist or more comfortable lifestyle will directly determine how much money you need for retirement. In general, non-housing retirement expenses to consider include:

Utilities such as water, electricity, gas, and telecommunications
Groceries and dining
Leisure and entertainment
Travel
Transportation
Household goods and appliances
Fashion and personal care
Medical expenses

According to the AIA Desired Retirement Tracker, respondents hope to spend a median of HK$16,304 per month after retirement. Regardless of lifestyle preferences, physical health inevitably declines with age, making illness an unavoidable challenge during retirement in Hong Kong⁵.

If a retiree develops a serious illness, the financial burden on individuals and families can be significant. As medical costs can reach millions of Hong Kong dollars and are difficult to predict, many people choose to purchase medical insurance and critical illness insurance earlier in life as part of long-term retirement planning.

Optimising Retirement Income in Hong Kong: How to Create a Stable "Monthly Income"

MPF Withdrawal Strategies

When you reach the retirement age of 65, the Mandatory Provident Fund (MPF) becomes an important source of retirement savings. You should choose a withdrawal method based on your retirement budget and ongoing cash flow needs.

Lump-sum withdrawal:
Offers high flexibility and can be used to repay debts or cover major medical expenses. However, without proper planning, assets may be depleted prematurely.

Installment-based withdrawal:
Simulates a monthly salary and provides stable cash flow to support daily expenses, such as the survey's median monthly spending of HK$16,304. Remaining assets can stay invested in the account for continued growth.⁵

Integrating Government Allowances and Social Welfare into Hong Kong Retirement Planning

When planning retirement income, government social safety nets should not be overlooked, including:

Old Age Allowance: A monthly allowance provided to residents aged 70 or above.

Old Age Living Allowance: Additional financial support for elderly residents who meet asset requirements.²

Find Out How Much You Need for Hong Kong Retirement

Once you understand the fundamentals of retirement planning and retirement budgeting, you can use AIA's retirement calculator to quickly estimate how much you may need for retirement.

By entering basic information such as your age, desired retirement age, income, expected retirement expenses, MPF contributions, and expected investment returns, the calculator can help you estimate:

The total amount required for your ideal Hong Kong retirement lifestyle
The savings you may accumulate by retirement
Any projected retirement savings gap
The additional monthly savings needed to achieve your retirement goals

^{The information provided is for general reference only and does not constitute any sales advice, product recommendation, or service offer. Before purchasing any insurance products, customers should complete a financial needs analysis. Product information is for reference only and does not include full policy terms. Early policy surrender may result in proceeds significantly lower than premiums paid. AIA does not guarantee the accuracy or completeness of the information provided and accepts no responsibility for any loss arising from its use.}

Hong Kong Retirement Budget FAQs

According to the AIA Desired Retirement Tracker (the survey) , many Hong Kong residents tend to underestimate the role of the Mandatory Provident Fund (MPF) in their overall retirement planning². Respondents expect that only around 30% of their retirement savings will come from MPF. However, as of the end of 2024, there were already 125,000 MPF accounts with accumulated balances exceeding HK$1 million, demonstrating the long-term growth potential of MPF when contributions and investments are managed effectively. AIA recommends using MPF Smart Adviso to optimise investment portfolios and help bridge retirement savings gaps as part of a sustainable Hong Kong retirement budget.

As life expectancy in Hong Kong continues to increase, retirement planning must take into account expenses spanning more than 20 years. According to data from the Census and Statistics Department, the average life expectancy in Hong Kong is 83 years for men and 88 years for women.

Based on survey findings showing that the average ideal retirement age is around 61.7, working professionals should be prepared to live for over two decades without stable employment income. This makes long-term planning and realistic retirement budgeting essential for a secure Hong Kong retirement.

Overall retirement preparedness in Hong Kong remains inadequate. The AIA Desired Retirement Tracker (the survey) found that as many as 72% of respondents do not have sufficient retirement savings². On average, the retirement savings gap reaches HK$2.564 million, indicating a significant shortfall between expected and actual retirement resources. As a result of insufficient savings, respondents estimate that they may need to delay retirement by an average of 12.8 years to achieve their retirement goals. This highlights a substantial gap between retirement expectations and reality, reinforcing the importance of early, disciplined retirement planning and careful management of the retirement budget for Hong Kong retirement.

Data accurate as of 19 December 2025

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^1.Census and Statistics Department, Statistics and You, Retrieved December 19, 2025, https://www.censtatd.gov.hk/en/page_235.html

^2.The 16th AIA Desired Retirement Tracker (the survey) was conducted between 13 August and 31 August 2025 using a combination of online questionnaires and face-to-face interviews. A total of 1,003 working Hong Kong residents, aged 18 to 65 and holding at least one Mandatory Provident Fund (MPF) account, were surveyed to examine their goals, perceptions, and the feasibility of achieving an ideal retirement lifestyle. The survey data were weighted according to the distribution of Hong Kong's working population, including age, gender, and monthly personal income, to ensure that the sample accurately represents the characteristics of the local workforce. The survey was conducted by the independent market consultancy firm Cimigo.

^3.The 2025-26 Budget, Retrieved December 19, 2025, https://www.budget.gov.hk/2025/eng/budget03.html

^4.Rating and Valuation Department (2025), Property Market Statistics, Retrieved December 19, 2025, https://www.rvd.gov.hk/en/publications/property_market_statistics.html

^5.AIA Group Limited, Your desired retirement goal, Retrieved December 19, 2025, https://www.aia.com.hk/en/help-and-support/employee-benefits/calculators/retirement-savings-calculator