Residents expect to fall short of $5m life savings target

They expect they can set aside only $3.15m after retirement.

Hong Kong residents widely expect to save $3.15m as their life savings which falls short of the target they believe will set them comfortably after retirement, according to a survey by insurer AllianzGI. 

With savings of $16,950 monthly, residents believe that $5m savings is ideal to sustain up to 14 years of retired life.

The survey also revealed that respondents have been postponing their retirement age to 62.4 on the back of high cost of living and inflation impeding their savings. 

The proportion of citizens aged 65 and older is projected to account for over a fourth (26.4%) of Hong Kong’s population by 2036, according to a report from the Census & Statistics Department.

Also read: Hong Kong's staggering surplus earmarked for ageing population

To respond to the needs of this growing demographic, HKMC Annuity rolled out in July an annuity plan for residents aged 65 and above.

Those under the plan can immediately receive a guaranteed stream of fixed income after paying a single premium between $50,000 and $1m with men receiving a monthly payout of $5,800 whilst women will get $5,300 for the rest of their lives upon a premium payment of $1m.

However, market response has so far been lacklustre with a total subscription amount of $4.94b out of the $10b issue limit.

“Annuity is as yet an emerging concept in Hong Kong. For annuity to become widely accepted it will take time and more education from the government,” Philip Tso, head of institutional solutions for Asia-Pacific at AllianzGI told South China Morning Post.