More than 70 per cent of Hongkongers fear running out of savings when they retire, while 50 per cent say they do not have a clear retirement plan, according to a recent McKinsey survey in the city, where 22 per cent of residents are over 65.
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The survey found only 16 per cent of those aged from 55 to 65 and 23 per cent of those over 65 had set aside assets of more than HK$10 million (US$1.3 million) for retirement, despite financial institutions’ suggestions to have a portfolio worth HK$20 million when they retire.
The respondents cited a lack of knowledge, urgency and other pressing financial obligations for not adequately preparing for retirement, according to McKinsey.
The survey revealed “critical gaps that can be addressed by financial advisers and insurance professionals”, said Bernhard Kotanko, a senior partner at McKinsey Hong Kong.
Hong Kong has one of the longest life expectancies in the world, revealing an unprecedented phenomenon: people are living longer than ever, but the city’s financial services for retirement preparation are relatively “nascent”, according to Kotanko.
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Existing conversations about retirement from financial advisers “could be better”, he said. “Advisers aren’t really equipped to have those conversations, while their empathy and advice sophistication could be better.”