Retirement Planning tips for Different Life Stage

Assisting you to effectively manage your MPF assets and consolidating MPF accounts, AIA offers retirement tips for each major stage of life for your preparation of enjoyable retirement. Here are how you could better manage your MPF personal account, consolidate MPF accounts and learn more about mandatory contribution.

You're a student with summer job

Though you are still a student, your employer is required by law to set up an MPF account for you, as long as you are over the age of 18 and have worked for at least 60 days. While your summer job may not add much to your MPF savings, it may grow over time under the compounding effect and become the foundation for your nest egg. Bear the following in mind as you manage your MPF account:
  • Minimum relevant income level for employee contributions – If your monthly income is lower than HK$7,100, you are not required to make mandatory contributions. However, your employer is still required to contribute 5% of your monthly relevant income. 
  • Contribution holiday – You are not required to make mandatory contributions for the first 30 days of your employment, plus the first incomplete payroll period immediately following that 30-day period. However, your employer is required to make mandatory contributions from the first day of your employment. 
  • Consolidating your personal accounts – If you have multiple personal accounts from your past summer jobs or part-time jobs, you may want to consolidate them into one for easier management.

You are just starting your career

Following graduation, you may face many challenges as you begin your career. Your financial status and knowledge may fall short when comparing to your older peers, but your youth can be your advantage when it comes to retirement planning. By starting early, you might have a better chance of achieving your dream retirement! Bear the following in mind as you manage your MPF account:
  • Actively manage your MPF – Don't neglect your MPF investments just because you don't have a huge salary and make limited contributions. In fact, see it as a chance to learn about investing and how the market works. As your contributions accumulate, so will your investment skills. 
  • Consolidate your personal accounts – Those just starting their careers usually change jobs quite often. This results in a large number of personal accounts, making it hard to keep an eye on investments, let alone manage them. Consolidate your personal accounts each time you change jobs. This will make it easier and less time-consuming to manage your MPF, and seizing investment growth opportunities. 
  • Prepare early – Many choose to spend their money on travelling and other entertainments rather than invest in their retirement – until it is almost too late. In fact, the longer your investment period, the more your wealth will grow with compounding effect, and the faster you will achieve your retirement goals. With additional voluntary contributions, you can easily grow and manage your retirement investments.
With our Retirement Savings Calculator, all you need is to enter some basic information in order to estimate the savings you need for retirement. Then you can start planning!

You are striving for career success

With your high-flying career, you have considerable savings and abundant financial knowledge. However, this may still be insufficient for your dream retirement. To fill this retirement gap, take a look at the tips below:
  • Establish a clear goal – Everyone has a different dream for their retirement, and thus different savings needs. Whether you wish to spend your retirement years living modestly or lavishly, establishing a goal is the first step towards achieving the retirement you want. 
  • Start saving early – Time is a crucial element of retirement planning. Start saving before the age of 30 to take advantage of the compounding effect for extra retirement savings, maximising your chance of a fruitful, worry-free retirement. 
  • Allocate 20% of your monthly salary as savings – We suggest saving at least 20% of your monthly income for retirement, and avoid spending money you don't have. That way, you bring yourself closer to meeting your savings goals! 
  • Manage your retirement savings regularly – Make a habit of managing your MPF and be familiar with your investment portfolio. That way, you can make adjustments according to your age and preference for risk whenever you feel the need.

You are about to retire

Stable and mature, you understand the importance of portfolio diversification, and MPF may not play an important role in your overall investment plan. Regardless of where your retirement savings are invested in, they can still achieve considerable growth potential as long as you manage them right. You can enhance your retirement life even further by considering the following:
  • Consolidate accounts for easier management – If you have changed jobs and hold multiple MPF personal accounts, it can be complicated to manage them separately. Consolidate your accounts as soon as possible and consider transferring your preserved assets and Employee Choice Arrangement (“ECA”) benefits to a single account. This will give you a clearer picture of your investments and enable you to reallocate your investment mix according to market conditions. 
  • Make use of automatic asset rebalancing service – We offer MPF members free automatic asset rebalancing service, which automatically rebalances your portfolio investment ratio according to your age. As retirement approaches, your ratio of equity funds will gradually reduce automatically, helping to lower the risks associated with market volatility, thus saving time and effort. 
  • Staged withdrawal service – Once you reach retirement age, this service allows you to withdraw your MPF assets in stages, according to your needs and preferences, giving you more flexibility in your MPF management.