1.Determine what you want to do after you retire
The first step to creating a retirement wealth management plan does not necessarily involve boring financial details. First, think about what you would like to do upon retiring. Do you want to return to school, volunteer at a charity, migrate, travel more, or develop new interests and hobbies? Make a list prioritising these activities.
2. Understand your financial needs and evaluate your economic situation
Based on how you want to be living after retirement, make an estimate of how much money you'll need to achieve these goals.
You then need to see if this is possible by assessing your present economic situation and financial needs:
- Can you begin to make retirement-related wealth plans immediately, or do you have to repay other debts first?
- Can you retire smoothly based on your present situation? How far are you from making a successful retirement?
3.Create a wealth management plan
Your wealth management plan for retirement should not only meet your personal needs. It should also take into consideration the people who are financially dependent on you.
Additionally, you need to consider these two major risks:
- Longevity risk
An improvement in medical technology and rising standards of living have increasingly lengthened China's average life expectancy to match that of developed countries and regions. The retirement period of Chinese workers is now longer, corresponding to lengthier working years. If you want to retire early, you'll have to start planning early.
- Inflation risk
You have to consider long-term inflation risks in your retirement plan. Set additional funds aside for a rainy day so that you can enjoy a better quality of life after retirement. Start planning as soon as possible; this will go a long way toward easing the pressure of preparing for your retirement fund.
If you're an HSBC Premier customer, please contact your relationship manager to discuss your retirement-related wealth management plan.
You may also make an appointment, and go to an HSBC branch for a one-on-one consultation.
4. Execute the plan and review it at any time
Executing your retirement wealth management plan is easier than you think - you can quickly accumulate wealth even with a small investment.
As you age and your living conditions change, you should make corresponding changes to your wealth management plan. Your personal economic condition in your 30s is undoubtedly different from when you're in your 60s. The specific details of your retirement wealth management plan should be updated as is necessary at any point in time.
Let's say you intend to commit a certain proportion of your income into your retirement wealth management plan at a percentage equal to half your age. This means that when you're 36, you should commit 18% of your income, and when you hit 40, this proportion should rise to 20%.
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