ARTICLE

Insufficient Retirement Fund Could Disrupt the Second Half of Your Life

7-min read

Updated on 2026-3-31

Author：AIA Content Editorial Team

Hong Kong people are living longer than ever, yet many have not built up enough retirement savings to support life after they stop working. With rising life expectancy and persistent inflation, insufficient retirement funds may force individuals to delay retirement or make compromises to their desired post-retirement lifestyle. Without proper retirement planning, the ideal retirement life many envisions may become increasingly difficult to achieve.

Effective retirement planning should begin as early as possible. Through disciplined saving and retirement planning, individuals can gradually build a sustainable retirement fund that supports their future lifestyle goals. With the right planning approach and appropriate financial tools, achieving a stable and fulfilling retirement can become a realistic and attainable goal.

Current Survey Insights on Retirement Life and Retirement Fund Readiness

Hong Kong Government Statistics: Average Life Expectancy

According to Hong Kong government statistics¹, in 2024:

The average life expectancy for men is 82.8 years
The average life expectancy for women is 88.4 years

AIA Desired Retirement Tracker (the survey): Retirement Fund Gap

The retirement fund gap has reached a new high, with the median amount of ideal retirement savings amounting to HKD 3.294 million²

AIA Desired Retirement Tracker (the survey): Insufficient Retirement Savings

Approximately 72% of respondents reported that their retirement saving is insufficient².
The average retirement fund shortfall has reached HKD 2.564 million², highlighting the urgent need for more effective retirement planning and long-term wealth accumulation strategies.

Turning Retirement Dreams into Reality: AIA's Four Core Pillars of Retirement Planning

retirement planning - retirement fund gap - deferred annuity

Facing the dual challenges of increasing life expectancy (82.8 years for men and 88.4 years for women) and rising inflation, relying on basic savings alone is no longer sufficient. With the median ideal retirement fund in Hong Kong standing at HKD 3.294 million, individuals need to adopt a more proactive and structured approach to retirement planning. The following four core pillars can help you build a sustainable retirement fund and move closer to your ideal retirement life.

Set Clear Goals and Plan Early: Calculate Your Required Retirement Fund

Effective retirement planning starts with a clear understanding of your desired retirement lifestyle and future expenses. By defining concrete retirement saving goals early, you can begin building your retirement fund with purpose and direction. Regular reviews and flexible adjustments help ensure your plan remains aligned with both market conditions and personal circumstances.
The total retirement fund required varies significantly depending on lifestyle choices. With the median ideal retirement savings at HKD 3.294 million, tools such as retirement calculators can help quantify the gap between your expected retirement savings and your target retirement lifestyle.

Strengthen Financial Literacy: Monitor Retirement Saving Progress

Retirement planning requires ongoing financial awareness to prevent long-term savings from being eroded by inflation.
The savings progress indicator, annual savings rate and withdrawal‑rate targets are projected based on factors such as your selected retirement age, expected income growth, retirement duration and desired retirement lifestyle. These projections are designed to help you gain a clearer view of your retirement savings progress. Actual outcomes may vary depending on individual circumstances and market conditions.
Based on these assumptions, individuals are generally advised to allocate at least 20% of their pre-tax income each year toward retirement savings to build a resilient retirement fund.

Leverage Financial Tools: Assess Your Retirement Fund Gap Efficiently

Choose appropriate wealth management tools based on your risk tolerance and financial situation to support long-term capital growth.
The earlier you begin retirement saving, the more you can benefit from the power of compounding. If retirement planning is delayed, higher contributions are often required to make up for lost time.
Retirement Calculator: Click to instantly assess the gap between your current retirement fund and your ideal retirement goal.

Seek Professional Advice: Enhance Retirement Planning with Expert Support

Insurance solutions can form part of a well-rounded financial planning strategy when aligned with your long-term goals. Seeking advice from a financial planning consultant can help you select suitable insurance plans and prepare for a fulfilling second stage of life.
In addition to building up your retirement reserves, you may also consider incorporating medical protection into your overall retirement plan based on your personal needs and protection gaps. This can help reduce the potential impact of future medical expenses on your retirement savings.
If you wish to secure a more stable stream of income after retirement, you may consider annuity products as one of your planning options. For example, a Qualifying Deferred Annuity Policy (QDAP), such as the AIA Deferred Annuity Plan 2, generally includes an accumulation period that allows your funds the potential for long‑term growth, while also offering tax deduction eligibility—making it a suitable option for retirement reserve planning.
As insurance products differ in their coverage details, return structures, risk factors, and suitability, you should read the product materials and risk disclosures carefully before applying, and evaluate based on your own needs.

retirement saving - long-term financial planning - retirement savings insurance

AIA Retirement Solutions: Building a Stable Retirement Fund with QDAP and Retirement Savings Insurance

When planning your ideal retirement lifestyle, choosing the right retirement savings products is a crucial step toward achieving stable cash flow and long-term financial freedom. AIA offers a wide range of retirement solutions , including tax-deductible Deferred Annuities (QDAP) and retirement savings insurance plans that combine both savings and life protection, helping you create a retirement strategy tailored to your goals.

There is no one-size-fits-all retirement solution. The key is to ensure that the chosen solution aligns with your income pattern, retirement age, and long-term financial goals.

To learn more about product features, return mechanisms, or potential tax benefits, click "Retirement Income" to explore detailed information on deferred annuity and retirement savings insurance solutions.

AIA Retirement Planning FAQ

According to the AIA Desired Retirement Tracker (the survey), the median ideal retirement fund is HKD 3.294 million 2. However, 72% of respondents reported insufficient retirement savings, with an average retirement fund shortfall of HKD 2.564 million. This gap suggests that many individuals may need to delay retirement by an average of 12.8 years to reach their retirement goals.

To maintain a desired standard of living after retirement, individuals are generally advised to allocate at least 20% of their pre-tax income annually toward retirement savings. This approach helps mitigate the financial impact of delayed retirement planning.

Qualified Deferred Annuity Policy (QDAP) is one of the most effective tax-efficient retirement planning tools. For example, AIA Deferred Annuity Plan 2 is designed to provide stable annuity income after retirement. Premiums paid may be tax-deductible^#, with an annual deduction cap of up to HKD 60,000 per taxpayer.

^# Tax deductions is one of the allowable deductions from assessable income, it does not equate to a direct deduction from total tax payable. For details of tax deductions, please visit Inland Revenue Department (IRD) of HKSAR website and consult your tax and accounting advisors for tax advice.

AIA Deferred Annuity Plan 2 focuses on generating long-term retirement income and offers tax-deductible benefits as a QDAP product. Retirement savings insurance plans, such as Forever Love Coupon Plan 5, focus onwealth accumulation and life protection through guaranteed cash value, guaranteed cash payouts, and non-guaranteed bonuses, but do not qualify for QDAP tax benefits.

When planning for retirement, individuals should consider whether to include medical protection in their overall strategy based on their personal needs, protection gaps, and financial circumstances. This can help manage the potential impact of future medical expenses on retirement savings. In addition, customers should select suitable wealth‑management tools according to their risk appetite and financial situation.

This information is owned by AIA, and may not be copied or reproduced without AIA’s written consent. You may not copy or store this content on any other website or content platform.

This information is for general reference only and does not constitute sales advice, product recommendations, or service offers. Before purchasing an insurance product, customers must complete a financial needs analysis. AIA does not guarantee the accuracy and completeness of the content and information provided. AIA reserves the right to pursue legal action and seek compensation for any infringement and/or legal issues.

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Census and Statistics Department (2025), Women and Men in Hong Kong - Key Statistics, https://www.censtatd.gov.hk/en/wbr.html?ecode=B11303032025AN25&scode=180
The 16th AIA Desired Retirement Tracker (the survey), was conducted between 13 August and 31 August 2025. The survey collected responses through both online questionnaires and face-to-face interviews with a total of 1,003 employed Hong Kong residents aged 18 to 65 who held at least one Mandatory Provident Fund (MPF) account. The study examined working individuals’ goals, perceptions, and perceived feasibility of achieving an ideal retirement lifestyle. Survey data were weighted according to the distribution of Hong Kong’s employed population, including age, gender, and monthly personal income, to ensure that the sample accurately reflects the characteristics of the local working population. The survey was conducted by the independent market research consultancy Cimigo.