The rate of 8.9% could deplete their savings in a decade.
Investors in Hong Kong expect to draw 8.9% out of their retirement savings each year and not run out of money, a survey by Schroders revealed. But Schroders warns that this rate is unsustainable in the long run.
“Our calculations show that an 8.9% withdrawal rate could deplete a retiree’s savings in a decade,” said Kelvin Lee, Schroders’ head of institutional business in Hong Kong.
Top areas of spending include healthcare costs for their own (55%) and their loved one (36%), non-essential purchases like for holidays (35%), and financial support for relatives like education costs (25%).
A third or 34% of investors took more risks with their retirement savings than with their personal savings, whilst a quarter or 24% had the opposite stance. Younger generations were found to take on more risks generally.
In general, investors save an average of 12.2% of their current income specifically for retirement, lower than the global average of 15.3% and the Asian average of 15.9%. Working baby boomers were found to save the highest proportion at 15.7%, compared with millennials (11.8%) and Generation X2 (11.9%).
Four in 10 investors in the city expressed concerns they are not saving enough ahead of retirement, compared with 26% in Asia and 24% globally. More than a third or 35% said that more information about likely living costs in retirement would convince them to save more.
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