Deep Dive delves into hot issues in Hong Kong and mainland China. Our easy-to-read articles provide context to grasp what’s happening, while our questions help you craft informed responses. Check sample answers at the end of the page.
News: Older Hongkongers are pushing back retirement due to finances
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Survey finds that more than half of respondents do not plan to retire at age 65 because of concerns about money
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Many say they want to continue working to keep their minds active, find a sense of achievement
More than half of Hong Kong residents do not plan to retire at the typical retirement age of 65. Many feel they cannot reach the average HK$5 million savings target necessary for a comfortable post-work life, according to the T. Rowe Price Hong Kong Retirement Survey.
About 52 per cent of the 600 respondents said they would not retire at age 65. Among them, about 80 per cent preferred not to retire at all or preferred a “micro-retirement”. This involves taking a break for several months to a few years before returning to work.
“Financial pressure is certainly one factor, especially in a high-cost city like Hong Kong,” said Shen Wenting, who works at T. Rowe Price.
About 60 per cent of respondents had a retirement savings target between HK$2 million and HK$10 million. The average was HK$5 million, considered enough for them to feel secure in completely stopping work.
One-third of respondents felt they could not achieve their goals. Forty per cent reported not having any retirement savings target at all. This may explain why 62 per cent cited the need to maintain an income as their reason for not retiring at age 65.
The survey showed that non-financial motivations were equally influential. Shen noted that 69 per cent of respondents wanted to continue working to keep their minds active, while 40 per cent sought the sense of accomplishment that work provided.
“These findings suggest a growing desire to reprioritise life beyond just income,” Shen said.
She said about 54 per cent of respondents kept their retirement savings in time deposits, which currently offer interest rates of only 1 per cent to 2 per cent. Meanwhile, 52 per cent chose savings accounts with almost zero interest.
Shen credited the conservative investment choices to the belief that “cash is king”, as well as economic uncertainty. She urged retirees to consider a different investment approach to meet their retirement goals.
For those wishing to retire at 65, Shen suggested that investing more in stocks at a younger age could yield higher returns. Then, residents could shift to lower-risk fixed income as they aged.
Staff writer
Question prompts
1. Based on the information in the news, which of the following is true?
(1) Around 65 per cent of survey respondents use time deposits for their retirement savings.
(2) Eighty per cent of survey respondents will not retire or choose micro-retirement.
(3) Forty per cent of respondents feel a sense of accomplishment from their jobs.
(4) A micro-retirement is when you retire with less money.
A. (1), (2) only
B. (2), (3) only
C. (2), (4) only
D. (1), (4) only
2. According to the news, what are TWO reasons why older Hongkongers are pushing back retirement or choosing not to retire at all?
3. According to Shen, why are many older Hongkongers cautious about their investments? How are they saving money, and what are the disadvantages of their choices? Explain using the news and your own knowledge.
Cartoon
Question prompts
1. How does the cartoon relate to the information in the news?
2. Using the news and your own knowledge, list ONE advantage and ONE disadvantage of retiring at age 65.
Glossary
retirement age: the age at which a person is expected to or required to stop working
time deposits: a money deposit at a banking institution that cannot be withdrawn for a certain period of time
interest rates: for borrowers, the interest rate is the amount you are charged for borrowing money – shown as a percentage of the total amount of the loan. The higher the percentage, the more you must pay back. If you are a saver, the interest rate, also called the savings rate, tells you how much money will be paid into your account, as a percentage of your savings. The higher the savings rate, the more you will get.
stocks: investments that allow a person to become a partial owner in a company. Those who hold stocks are called shareholders. They bear the financial risk of a business, but they can also earn money if the company does well.
Sample answers
News
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B
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The biggest reason why older Hongkongers are choosing not to retire or retire later is financial. With Hong Kong being such an expensive city, many are finding that their retirement savings are not sustainable. One third of people surveyed do not expect to meet their retirement savings goals. Many respondents also reported that they would continue working because they enjoy their job or the sense of fulfilment it brings them, and because it keeps their minds active.
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According to the survey, more than half of people kept their retirement savings in time deposits with interest rates of only 1 or 2 per cent, while many chose savings accounts with zero interest. Due to inflation, this means that their money will be devalued, giving them less purchasing power in the future. Shen said that old beliefs that “cash is king” and economic uncertainty were the reasons for these financial decisions.
Cartoon
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The man in the cartoon appears to be elderly and is shaking a piggy bank, only to find there is nothing inside it. This is representative of the News article because it details how older Hongkongers are not retiring due to financial instability.
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If a person retires at 65, it means they have more free time to do what they want, whether it be travel, start new hobbies, or spend time with their families. However, one disadvantage is that they may run out of money early on and need to return to work when they are older, which would make it more difficult to find a good job.
