The middle-class may not be as well prepared for retirement as we may think, as the case is often “the more they earn, the more they spend”! To secure your ideal retirement, the middle-class should have basic retirement knowledge and take note of three retirement tips. Read below to get more insight on middle-class's retirement planning.
Three tips the Middle Class should know about retirement
Tip 1: Leverage on compounding effect to grow your wealth
The benefits of compounding effect grow with time, and as such the earlier you start your savings – whether via MPF or other forms of contribution – the better rewards you can reap!
Hint:
Reserve a small amount from your spending budget and allocate it to your retirement savings or MPF voluntary contributions. For example, by saving HK$1,500 per month you would have a considerable sum of HK$600,000 after 20 years, assuming 5% p.a. return.
Tip 2: Think before you buy
Retirement is not about being frugal – but about spending wisely. One of the biggest obstacles to saving is interest-free credit card installment payment plans – the ones that many are so prone to abusing!
Hint:
Pause and think before you buy every time, and refrain from impulsive buying. Don't rush to buy your heart's desire but give yourself one week – if the attraction remains, by all means go ahead!
Tip 3: Use professional services to consolidate your accounts
Many among the middle-class enjoy a high income with a good sum saved in their MPF accounts. However, as they change jobs, new accounts are opened while old ones are left unmanaged. Such negligence lends to unmonitored investments and repetitive administration charges. Spare a little time to consolidate your accounts, and take the initiative to manage your investments – it is the key to better returns!
Hint:
Seek professional help if you are too busy to do it yourself. Simply fill in the Scheme member's request for account consolidation form and you can consolidate all your accounts, start managing your funds flexibly, and adjust your investments to the market conditions and life stage needs.