SJP Retirement planning
Whether retirement is many years away or just around the corner, unless you start planning for retirement now, there is a real possibility that you could outlive your savings.
In fact, more people are seeking professional retirement planning services to help secure a comfortable future. The earlier you start planning, the easier it will be to create the retirement lifestyle you want. The stark reality is that the majority of us need to save more. With people living to a greater age, retirement now represents a far greater proportion of our lives than previously expected.
We now need to accumulate more savings to meet the extra costs of living longer. The decisions we make today will dictate the standard of living we will enjoy in retirement.
Retirement planning services in Hong Kong
The golden rule for retirement planning is to determine exactly how much you will need for your retirement and start planning for it now.
Hong Kong ranks as one of the most expensive cities in the world. Unsurprisingly, it takes careful planning to contend with the high cost of living. Our recent study found that Hongkongers are likely to spend at least 20 years in retirement*. Given the high cost of living, it’s crucial to ensure you have sufficient savings to see you through this extended period.
Our professional retirement planning services are here for you. With over 30 years of experience, we bring industry expertise to help you secure a comfortable future. We take time to understand your goals and cover all bases. Through personalised financial advice and customised retirement plans, we help you to make your retirement ambitions a reality.
*Sandpiper Communications (2022). Never too late to plan: Preparing for the golden years, commissioned by St. James’s Place
Retirement planning services
Our retirement planning services encompass every aspect of your financial journey towards retirement. We start by conducting a comprehensive review of your current financial situation, taking into account your assets, liabilities, income, and expenses.
For expatriates, we recognise the unique financial landscape that comes with living and working abroad. Our dedicated team of retirement planning consultants specialise in international investment options and cross-border financial plans.
Curious about how much you'll need for your retirement? Our comprehensive retirement calculator can help you estimate your future needs and determine how much you need to save.
Why choose St. James's Place?
With over 30 years of experience in financial services, we're committed to helping you plan the retirement of your dreams. At St. James's Place, our advisers take the time to get to know you and your aspirations. We offer face-to-face, highly bespoke financial planning to help you make the most of your golden years.
Our commitment to responsible investing ensures your investments not only align with your financial goals but also your values. With St. James's Place, you can enjoy peace of mind knowing you're investing in a sustainable future, both for yourself and the world around you.
Let us work with you on your journey towards a fulfilling retirement.
Expert Retirement Advisers
At St. James's Place, our retirement advisers bring decades of combined experience and in-depth industry expertise to the table. We understand that retirement planning is not a one size-fits-all endeavour. Your retirement dreams are unique, and your financial plan should reflect that.
The golden rule is to determine exactly how much you are going to need in retirement – and to start planning for it now. We take time to understand what that means for you and make sure all of the important things are covered, whilst helping you make your ambitions for retirement a reality.
Our retirement planning services encompass every aspect of your financial journey towards retirement. We start by conducting a comprehensive review of your current financial situation, taking into account your assets, liabilities, income, and expenses.
From there, we develop a long-term financial strategy that aligns with your retirement goals. This strategy may involve a combination of investment options, tax-efficient saving plans, and estate planning considerations. We also offer regular reviews to ensure your plan remains on track as your circumstances change.
For expatriates, we recognise the unique financial landscape that comes with living and working abroad. Our dedicated team of retirement planning consultants specialise in international investment options and cross-border financial plans.
We can help you understand the intricacies of multiple tax jurisdictions, currency fluctuations, and international investment regulations. Our goal is to empower you to make informed decisions that will secure your financial future, no matter where life takes you.
Activate your retirement plan
Are you ready to build a secure retirement nest egg? Our retirement planning services can help.
Plan your retirement with confidence
We start by understanding your longterm goals and aligning them with your financial situation and risk tolerance. We then design a personalised retirement investment portfolio just for you. With regular reviews, our comprehensive services ensure that your plan delivers sustainable returns and keeps you on track for a comfortable future.
Tailored solutions for a globalised world
Our services are designed to navigate the complexities of a global landscape. No matter if you’re an expat or a resident, safeguard your financial plans as you adjust to a new place of work with our international investment options and cross-border financial planning.
Retirement planning starts with knowing how much you need to live comfortably. Use our retirement calculator to find out how much funds you need.
Why choose St. James’s Place?
At St. James’s Place, our financial advisers in Hong Kong are some of the most experienced and qualified professionals in the industry. They believe that financial advice has a simple mission:
To make sure you and your family have enough wealth to enjoy life the way you want to, both now and in the future. From investment planning to retirement and estate planning, St. James’s Place provides personal financial advice to help you create the future you envision.
- Backed by over 30 years of financial consulting experience: We look after £181.9bn* of client funds and have the expertise you can rely on long-term. From investments to pensions, we deliver guidance that keeps giving.
- Commitment to responsible investing: We have the advice and services that help our clients across life stages, such as starting to invest, planning your pension, and preparing an inheritance.
- Personalised financial planning: Instead of a one-size-fits-all approach, our solutions are tailored to the specific needs and risk tolerance of each individual client.
- Lifelong relationships built on trust: We build lasting connections with our clients through face-to-face meetings and regular communication.
Reach out to us to find out how we can do the same for you.
*Data correct as at 30 June 2024.
What’s your retirement target?
If your desired annual income is
Multiply by
This is roughly the fund size required
Calculating how big your retirement fund needs to be is relatively simple. Take into account all your likely living costs to estimate how much annual income you think you would need from the age of 65. Allow for inflation and then multiply the figure by 25. This gives you an estimate of your ‘magic number’ – the retirement fund you will need to provide the income you require.
The most powerful force in the universe is compound interest.
Albert Einstein
Beware the cost of delay
We have a choice of what we can do in retirement and when our retirement can start.
The key decision is when we start to make worthwhile investments. The sooner we start, the more choices we have later. If an investment of $10,000 pa to a retirement scheme commenced at age 30, a projected fund of $534,000 could be available at age 60, based on the assumptions shown below.
Look at what could happen if the start of the regular annual contribution was delayed by 5, 10 or 15 years.
| Fund value | Reduction in fund | % reduction in fund | Increase in annual contribution needed to provide a fund of $534,000 | |
|---|---|---|---|---|
| 5-year delay | 405,000 | 129,000 | 24% | $3,174 |
| 10-year delay | 296,000 | 238,000 | 45% | $8,042 |
| 15-year delay | 203,000 | 331,000 | 62% | $16,298 |
This example makes a number of assumptions:
- the average annual investment growth is 5% per annum, without inflation
- investment charges of 1.69%
- contributions are invested on the same day each year in a pension and are shown before charges are taken into account
- the example is only an illustration and actual investment returns may be more or less that those assumed in the illustration
- the individual has sufficient relevant Asia earnings to support the contribution amount paid
To put it another way, delay makes a big impact on your retirement provisions:
Making the commitment
Delay costs money, but making significant contributions need not be that difficult:
- Retirement savings could be seen as a necessary expense: they should not be an afterthought.
- They could be considered as an integral part of business or household budgeting, just like the heating and lighting bills.
- If cash flow is the problem, monthly contributions are a solution and the rest of the budget will adapt.
- Remember that making annual or single contributions has the possibility of buying into the market at the "wrong time". Monthly contributions help to smooth out the effect of fluctuations in unit prices.
Please note that inflation will affect the future purchasing power of a pension.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and can fall as well as rise. You may get back less than you invested.
Challenges of retirement in Hong Kong
Retirement planning in Hong Kong presents a unique set of challenges that individuals must navigate to secure their financial future. Let's explore some of these key challenges:
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Short-term mindset and lifestyle inflation
The fast-paced lifestyle in the UAE can foster a short-term mindset, making long-term financial goals like retirement savings a challenge. Many expats in Dubai get caught up in the vibrant lifestyle of the region, and the temptation to indulge in the present can overshadow the need to secure the future. Additionally, the pressure to keep up with peers can lead to lifestyle inflation, where expenses rise in tandem with income, making it difficult to save consistently.
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Lump-sum access to retirement savings
In the UAE, retirement savings like the end-of-service gratuity are typically received as a lump sum. While this provides flexibility, it also presents the challenge of managing a large sum of money responsibly. The temptation to spend it on immediate gratification or non-retirement goals can jeopardise long-term financial security.
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Limited workplace pension schemes
While pension schemes in Dubai like the DEWS (DIFC Employee Workplace Savings) exist, they are limited to specific employers and sectors. This leaves many expats without access to employer-sponsored retirement plans, placing the onus of retirement planning entirely on the individual.
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Limited understanding of the investment landscape
The investment landscape in the UAE can be complex and overwhelming for expats. There is a need to understand local market dynamics and investment vehicles, as well as knowledge to manage investments in the host country, and the home country. A financial adviser with intimate knowledge of both markets can provide clarity, develop a cohesive investment strategy that spans multiple jurisdictions and currencies, and ensure your retirement portfolio is well-diversified and resilient.
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Tax implications and cross-border planning
Expats face the intricate task of managing their retirement savings and investments across multiple tax jurisdictions. Understanding double taxation agreements, capital gains tax, inheritance tax, and the potential impact of currency fluctuations is crucial for optimising financial outcomes and avoiding unexpected tax liabilities. Seeking advice from a financial adviser is recommended to navigate these complexities effectively.
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Volatile economic conditions
The UAE economy, while dynamic and growing, is also susceptible to global economic fluctuations. These uncertainties can impact investment performance and retirement savings in the short term.
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Currency fluctuations
For expats who plan to retire in their home country or elsewhere, currency fluctuations can significantly impact the value of their savings and retirement income when converted back to their home currency.
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Evolving retirement visa regulations
While the UAE has introduced retirement visas to encourage long-term residency, the regulations and eligibility criteria are subject to change. Expats need to stay updated on these developments to plan their retirement accordingly.
The fast-paced lifestyle in the UAE can foster a short-term mindset, making long-term financial goals like retirement savings a challenge. Many expats in Dubai get caught up in the vibrant lifestyle of the region, and the temptation to indulge in the present can overshadow the need to secure the future. Additionally, the pressure to keep up with peers can lead to lifestyle inflation, where expenses rise in tandem with income, making it difficult to save consistently.
In the UAE, retirement savings like the end-of-service gratuity are typically received as a lump sum. While this provides flexibility, it also presents the challenge of managing a large sum of money responsibly. The temptation to spend it on immediate gratification or non-retirement goals can jeopardise long-term financial security.
While pension schemes in Dubai like the DEWS (DIFC Employee Workplace Savings) exist, they are limited to specific employers and sectors. This leaves many expats without access to employer-sponsored retirement plans, placing the onus of retirement planning entirely on the individual.
The investment landscape in the UAE can be complex and overwhelming for expats. There is a need to understand local market dynamics and investment vehicles, as well as knowledge to manage investments in the host country, and the home country. A financial adviser with intimate knowledge of both markets can provide clarity, develop a cohesive investment strategy that spans multiple jurisdictions and currencies, and ensure your retirement portfolio is well-diversified and resilient.
Expats face the intricate task of managing their retirement savings and investments across multiple tax jurisdictions. Understanding double taxation agreements, capital gains tax, inheritance tax, and the potential impact of currency fluctuations is crucial for optimising financial outcomes and avoiding unexpected tax liabilities. Seeking advice from a financial adviser is recommended to navigate these complexities effectively.
The UAE economy, while dynamic and growing, is also susceptible to global economic fluctuations. These uncertainties can impact investment performance and retirement savings in the short term.
For expats who plan to retire in their home country or elsewhere, currency fluctuations can significantly impact the value of their savings and retirement income when converted back to their home currency.
While the UAE has introduced retirement visas to encourage long-term residency, the regulations and eligibility criteria are subject to change. Expats need to stay updated on these developments to plan their retirement accordingly.
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Inflation
Inflation
Inflation, or the rising cost of goods and services, is a persistent concern for retirees. Even a seemingly moderate inflation rate can significantly erode the purchasing power of your retirement savings over time. This is particularly challenging in Hong Kong, where the cost of living is already high. Essential expenses like housing, food, and healthcare can become increasingly burdensome as prices rise, putting a strain on retirees' budgets.
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Economic uncertainty
Economic uncertainty
Economic downturns and market fluctuations can create considerable anxiety for those approaching retirement. The inherent unpredictability of the economy and financial markets underscores the importance of building a resilient retirement plan that can withstand unexpected shocks. A sudden market downturn can drastically reduce the value of your investments, potentially jeopardising your carefully laid plans. Furthermore, a prolonged recession can lead to job losses and income reductions, hindering your ability to save for retirement or maintain your current standard of living.
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Longevity risk
Longevity risk
Advances in healthcare and living standards have led to increased life expectancy, which is undoubtedly a positive development. However, it also presents a challenge for retirement planning. The longer you live, the more financial resources you'll require to sustain your lifestyle throughout your retirement years. Underestimating your life expectancy can have serious consequences, potentially leading to the depletion of your savings and forcing you to make difficult choices or rely on external support.
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Healthcare costs
Healthcare costs
As we age, our healthcare needs tend to increase, resulting in higher medical expenses. These costs can encompass doctor visits, medications, hospital stays, and long-term care, and they can be both substantial and unforeseen. Without adequate planning and provisions for healthcare, retirees may encounter financial hardship and be compelled to compromise their quality of life. It is, therefore, essential to incorporate healthcare costs into your retirement plan to ensure you have the necessary resources to manage these expenses.
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Navigating the investment landscape
Navigating the investment landscape
The complexities of the investment world can be daunting for many individuals. This emphasises the importance of seeking professional financial advice to develop a sound investment strategy for retirement. In addition to these challenges, it's important to consider other macro factors such as:
- Low-interest rate environment: This can make it difficult to generate sufficient income from traditional savings accounts and fixed-income investments, potentially requiring individuals to take on more risk to achieve their desired returns.
- Global economic and political uncertainties: Unexpected events, such as trade wars, geopolitical tensions, or natural disasters, can cause market volatility and negatively impact investment performance.
- Changing demographics: Hong Kong's ageing population strains the pension system, potentially leading to reduced benefits or policy changes that could affect your retirement income
Inflation
Inflation, or the rising cost of goods and services, is a persistent concern for retirees. Even a seemingly moderate inflation rate can significantly erode the purchasing power of your retirement savings over time. This is particularly challenging in Hong Kong, where the cost of living is already high. Essential expenses like housing, food, and healthcare can become increasingly burdensome as prices rise, putting a strain on retirees' budgets.
Economic uncertainty
Economic downturns and market fluctuations can create considerable anxiety for those approaching retirement. The inherent unpredictability of the economy and financial markets underscores the importance of building a resilient retirement plan that can withstand unexpected shocks. A sudden market downturn can drastically reduce the value of your investments, potentially jeopardising your carefully laid plans. Furthermore, a prolonged recession can lead to job losses and income reductions, hindering your ability to save for retirement or maintain your current standard of living.
Longevity risk
Advances in healthcare and living standards have led to increased life expectancy, which is undoubtedly a positive development. However, it also presents a challenge for retirement planning. The longer you live, the more financial resources you'll require to sustain your lifestyle throughout your retirement years. Underestimating your life expectancy can have serious consequences, potentially leading to the depletion of your savings and forcing you to make difficult choices or rely on external support.
Healthcare costs
As we age, our healthcare needs tend to increase, resulting in higher medical expenses. These costs can encompass doctor visits, medications, hospital stays, and long-term care, and they can be both substantial and unforeseen. Without adequate planning and provisions for healthcare, retirees may encounter financial hardship and be compelled to compromise their quality of life. It is, therefore, essential to incorporate healthcare costs into your retirement plan to ensure you have the necessary resources to manage these expenses.
Navigating the investment landscape
The complexities of the investment world can be daunting for many individuals. This emphasises the importance of seeking professional financial advice to develop a sound investment strategy for retirement. In addition to these challenges, it's important to consider other macro factors such as:
- Low-interest rate environment: This can make it difficult to generate sufficient income from traditional savings accounts and fixed-income investments, potentially requiring individuals to take on more risk to achieve their desired returns.
- Global economic and political uncertainties: Unexpected events, such as trade wars, geopolitical tensions, or natural disasters, can cause market volatility and negatively impact investment performance.
- Changing demographics: Hong Kong's ageing population strains the pension system, potentially leading to reduced benefits or policy changes that could affect your retirement income
While these challenges may seem daunting, proactive retirement planning and seeking retirement planning services from a financial advisor can help you navigate these complexities and achieve your retirement goals. By developing a well-diversified investment strategy, considering inflation, and accounting for potential healthcare costs, you can build a resilient retirement plan that provides financial security and peace of mind for a comfortable retirement.
Retirement planning services FAQs
The amount you'll need for retirement depends on various factors, including your desired lifestyle, current age, expected retirement age, and estimated lifespan. Our retirement planning advisers can help you assess your individual needs and create a personalised plan to meet your financial goals.
A comprehensive retirement plan typically includes:
- Savings and investments: A diversified portfolio of investments designed to grow your wealth over time.
- Pension planning: Maximising your pension benefits through contributions and strategic planning.
- Tax optimisation: Utilising tax-efficient strategies to minimise your tax burden during retirement.
- Estate planning: Ensuring your assets are protected and passed on to your loved ones according to your wishes.
- Healthcare planning: Preparing for future healthcare costs and long-term care needs.
Retirement planning for expats in Dubai or other countries requires careful consideration of several factors, including:
- International tax laws: Understanding and optimising your tax obligations in both your home country and country of residence.
- Cross-border investments: Choosing the right investment options that align with your risk tolerance and international exposure.
- Pension transfers: Evaluating the pros and cons of transferring your pension to another country.
- Currency fluctuations: Managing the impact of currency exchange rates on your investments and retirement income.
Our advisers specialise in expat retirement planning and can guide you through these complexities.
It's recommended to review your retirement plan at least annually or whenever you experience a significant life change, such as a change in employment, marital status, or financial goals. Regular reviews with a qualified consultant allow you to adapt your plan to your evolving circumstances and ensure you stay on track to achieve your retirement dreams.
How large your retirement fund should be depends on your goals. Your current age and savings, as well as your targeted retirement age and monthly income, can indicate how much you will need. A general estimate can be achieved by multiplying your desired annual income by 25 for your ‘magic number’.
A robust retirement plan should include a personalised investment portfolio tailored to your goals and risk tolerance. It should also encompass strategies for passive income generation, tax efficiency, and risk management to ensure long-term financial security.
In addition to any existing retirement savings plans you may have, individuals planning for retirement in Hong Kong should also ensure that they are enrolled in a Mandatory Provident Fund (MPF) scheme. It is also wise to do a complete financial review with an adviser to track your retirement goals and progress.
Reviewing your retirement plan at least once a year is a good practice.
As market trends and your life changes, regularly reviewing your retirement plan helps you to stay ahead of the game. With the services of experienced professionals, you can leverage thorough research and expertise to ensure your assets continue to provide sustainable returns well into your later years.
Please note that past performance is not indicative of future performance, and that the value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances. You are advised to seek independent tax advice from suitably qualified professionals before making any decision as to the tax implications of any investment.
Why not discuss your journey to retirement and the full range of options available to you, today?