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Plan for the future

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We are living longer than we used to, thanks to improved standards of living and better healthcare.

Many people are enjoying longer retirements than they planned for, but that can come with the prospect of not being able to make ends meet in later life.

So the sooner you start saving for retirement, the more you'll be able to save, and the more comfortable you'll be.

In China, HSBC's own research shows that 66% of working people have either not yet started saving for retirement, have stopped doing so, or find it difficult to manage their retirement fund. 

How much might you need?

Everyone's situation is different, so there is no single rule to follow that will tell you exactly how much money you'll need for your retirement. It will depend on many factors, including:

  • The age you plan to retire
  • Whether you own your own home
  • The rate of inflation
  • Whether you have debts that you need to manage
  • Your family and number of dependents
  • Whether you plan to continue working, in any capacity, and semi-retire

A good starting point is to assume you will need between half and two-thirds of your salary, after tax is deducted, to maintain your current lifestyle.

Government pension

You may be entitled to a government or state pension, but in most cases it will be difficult to live on this alone. In some countries, they are means or asset tested and are only designed to support those most in need. You should plan to supplement any government pension with savings and investments of your own if you possibly can. Remember, too, that the terms and/or laws guiding government pensions may have changed by the time you reach retirement age.

Employer contributions

You may find that your employer has an obligation to contribute towards your pension or retirement fund in proportion to your own contributions. It can help to grow your savings significantly, and you may also be entitled to tax relief on the combined sums saved.

Some employers might also offer 'contribution matching', which is when they agree to make additional contributions into your retirement savings, as long as you agree to increase your contributions as well.

When planning for your future, here are 3 key points to keep in mind:

  1. Start as soon as you can. The earlier you start saving, the more the interest on your savings will compound, and the longer you will have to save.
  2. Make the most of any tax-free savings and employer contributions you're entitled to.
  3. Build your knowledge. You might want to seek advice from a professional financial adviser.

Financial wellbeing

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