Allianz Global Investors Retirement Confidence Survey found that there are “Action-takers”, those who actively manage their own retirement investment portfolio, and “Excuse-makers”, those who are too busy to manage their retirement investment. There are three key principles to achieving a high level of confidence towards retirement. 

Extra savings/investments by taking advantage of tax benefits to enhance returns in the long run

To encourage the public to save early for their retirement, the MPFA introduced tax benefits on Tax Deductible Voluntary Contributions (TVC). The tax deduction cap amounts to HK$60,000, which will take effective on assessment year 2019/20. In other words, taxpayers who reached the highest tax rate of 17% could save up to HK$10,200 in taxes. This can turn into additional savings for a better retirement life.  

Stay invested during retirement to generate regular monthly income

Annuity has become a new investment tool, as low risk and reliable income source are the top priorities for retirees. Annuity is able to generate stable income in the long term. 

Active management of retirement portfolio with solid investment knowledge and experience to diversify risks

Action-takers are actively involved in retirement planning and know more about investing. 88% of Action-takers are knowledgeable about retirement investment and understand the risk level, more than Excuse-makers (61%) and all other respondents (65%).

Be it the Action-takers or Excuse-makers, one should always stay active in managing their own retirement portfolio to mitigate downside risks amid short-term volatility, as well as to reduce long-term appreciation risks. With the newly launched tax deduction initiatives, pre-retirees and retirees can consider adding layers of retirement investments to enjoy tax deductions and the aggregate compound effect from their accumulated wealth.