Only 29% of the participants in the firm’s fourth annual survey said they felt confident about their ability to fulfil their retirement goals, compared to 32% the year before. Their pessimism was fuelled by concerns over the economic outlook and diminishing consumption power.
The respondents’ desired wealth upon retirement was, on average, HK$5.11m ($660,000), which was 17% higher than the year before, the report said.
It also indicated that their average monthly retirement savings had grown by 11% compared with the year before, to HK$5,118. Nevertheless, the respondents expected to accumulate only HK$3.19m on average before retirement (roughly the same as last year) which would leave them 38% short of their goal.
On average, Hong Kongers plan to retire at 62 years old and expect their retirement savings to sustain them for 12.2 years, according to the survey. Older respondents have a longer time horizon than younger ones and are more confident about their financial health.
On average, the respondents invest 59% of their retirement savings, with the remainder held in cash, the report said. Protection against inflation is the top priority of 61% of the respondents, even though 62% said they would cut their expenses after retiring.
Younger Hong Kongers do not give much thought to their retirement, the survey found. “Over half of this group has never considered or planned for retirement,” said Iris Ma Mei-suen, head of client relations at Allianz GI, in a statement.
In the 25-34 age group, 47% of respondents said they were too young to plan for retirement, and 40% prioritised overseas travel over saving for retirement. Younger people also tended to underestimate their retirement needs and the estimates of available funds, compared to older respondents. They put away the lowest average monthly amount. Those who do save for retirement tend to invest only half of their savings, on average, leaving the rest in cash.
Families with children showed a higher level of awareness of their financial needs and preparedness for retirement than unmarried respondents, revealed the survey. They had a narrower gap between the desired amount of retirement funds and their realistic estimation. They also showed a higher level of confidence in achieving their goals.
“Families with working parents and two children are more proactive,” said Ma. They save more, are better at monitoring their investments, and expect their retirement funds to last them longer than the average respondent.
The report was based on interviews with 800 Hong Kong residents aged 25-64, conducted in April 2017 by Nielsen, a market research company.
