The Reality of Working Past Retirement



Let’s face it, one of our biggest fears is that we won’t have enough saved to support ourselves when we retire. Worse yet, we will have to continue working a year or two longer to make ends meet—this, instead of enjoying our much-deserved retirement. 


A recent study shows that over half of professionals in Hong Kong expect to work after retirement to make ends meet because the MPF (Mandatory Provident Fund) is predicted to pay out only a third of their current income. In Hong Kong, the MPF is a mandatory state-regulated retirement savings method where employees contribute to a provident fund during their working years.


It’s not just a national concern in Hong Kong. Having a reduced income at retirement age is a global challenge.


This leads to many professionals seeking private retirement savings help from financial advisors. This supplemental saving could be the difference between a comfortable retirement free of worries or working longer to save more.




What are the reasons for working past retirement age?


Working past retirement should be a ‘want to’ and not a ‘need to’. It should be because you enjoy your work or feel you still have much to contribute to your industry. 


  • To supplement their pension – The main reason for most is that they do not have enough income to fund their retirement. They need to work and save for a few more years. Others even have to continue working till the day they die.
  • Family Responsibility – Sandwich generations are a common phenomenon these days. This is where the primary breadwinner must support adult children and older parents on their income. This can continue into retirement, increasing their financial burden significantly.
  • To maintain a particular lifestyle – Many people downgrade their lifestyle at retirement. Some wish to keep it and would have to continue working.
  • Divorce – During a divorce, a spouse may lose a large portion of wealth or half of their pension in certain countries. This could significantly stunt their retirement income, leaving them no option but to continue working.
  • To maintain a certain financial status – Let’s face it, some of us are high flyers and enjoy a certain financial status. A financial status we would like to carry into retirement. While most would downgrade their lifestyle, the high flyers continue working to maintain their financial status.
  • Contributing to society – Many retirees feel that age shouldn’t define their ability to work. They still have much to contribute to the community, so they continue working part-time as consultants or mentors. Others become volunteers or start small businesses to keep active. 



Solutions to be financially secure in retirement


There is an increasing focus shift to private pensions and retirement savings to bridge the retirement gap. The rising cost of living, volatile markets, and longevity have deformed our retirement plans. This leads us to take matters into our own hands, where companies took care of our pensions before.


A financial advisor can analyse your retirement portfolio. They help identify gaps in your retirement savings plan and provide solutions according to your financial situation.


  • Private pension plans – This is the one consistent solution throughout your professional career that does not depend on employment. You can accumulate many company pensions over time, but a private pension taken out early can benefit from time and compound interest. This interest can supplement any shortfall when you retire.
  • Pension transfers – Very often, an employer’s company pension scheme is generic in its investment goals. They do not necessarily actively manage your pension fund. Combining many workplace pensions into one increases the overall capital balance allowing higher compounding interest. Also, it lets you choose how your funds are managed and what funds to invest in. You can tailor-make your retirement investment according to your risk profile and retirement needs. 
  • Tax efficient solutions – Transferring your pensions to the right solution could provide favourable tax benefits. This leaves more capital for retirement.
  • Increase pension contributions to the maximum allowance – Try to increase your pension contributions to the maximum allowed, instantly boosting your retirement savings. 



It is never too late to revise your retirement plan. Chat with your financial advisor to get a plan of action in place to supplement your retirement income so you can choose to work not because you can’t afford to retire but because you enjoy what you do.


Please note, the above is for educational purposes only and does not constitute advice. You should always contact your deVere advisor for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.

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