There is a Chinese proverb that goes “It is difficult to start a business, but even more difficult to keep it on course.” For many of us, this saying can also apply to a variety of situations, including saving for retirement.
In Hong Kong, the Mandatory Provident Fund (MPF) system has been in place for over two decades. During this period, employees have adapted to this saving system, and many of them understand the importance of making voluntary contributions on top of their mandatory contributions. Once you’ve been proactive and established a consistent saving habit, it makes sense to keep it going. You can also expand your vision to your post-retirement saving plans, to make your pension go even further.
HSBC MPF supports our MPF members who want to create post-retirement financial plans and provides tools to calculate the amount of pension funding they need after retiring.
Since June 2021, we’ve provided a new MPF withdrawal service which allows members to choose to withdraw their MPF in regular instalments each month. This is in addition to the other options in which members can choose to withdraw their MPF partially, or in a lump sum. If you’re 65 or above, or qualify for an early retirement, you can use this service according to your financial needs. After completing a one-time application with no extra fee, eligible members can withdraw a designated amount from their MPF mandatory contributions, voluntary contributions and tax-deductible voluntary contribution accounts each month.
When you retire, you can choose to keep the money in your MPF account for continuous investment until you need it. When the investment market goes up, your pension can continue to grow. But when the market conditions are not favourable, your retirement savings might drop.
For example, the market could be volatile when you retire. If you withdraw most of your MPF to pay bills at that time, the growth potential of what you have left for continuous investment becomes limited. This will result in a lower amount of savings for the remainder of your retirement. Note that some trustees may charge extra fees if you make withdrawals from your MPF account more than four times a year.
To provide members with more options, HSBC MPF launched the monthly regular MPF withdrawal service so you can turn savings into stable retirement income. It also means the remaining money in your MPF account can continue to grow. No extra fee is required. This option can prevent you from losing a large part of your retirement savings to short-term unfavourable market conditions.
We encourage you to review your investment portfolio on a regular basis. Members can adjust investment choices any time using designated channels. To learn more about this new service, please visit HSBC MPF's website, or contact one of our specialists. You’ll be able to find out how to withdraw MPF and learn more about the MPF withdrawal rules and MPF withdrawal process.
1. Investment involves risks. Past performance is not indicative of future performance. The value of financial instruments, in particular stocks and shares, and any income from such financial instruments, may go down as well as up. For further details including the product features and risks involved, please refer to the MPF Scheme Brochure.
2. The content shared in this article should not be viewed as investment recommendation and advice. You should seek professional analysis and advice before making any decisions related to the information shared in this article.