Sun Life Hong Kong’s MPF Education Series
Many people in Hong Kong tend to have several misconceptions about the Mandatory Provident Fund, or simply MPF. One of these is the belief that once you switch jobs, the MPF contributions are lost. This is not true. Your accrued balance is yours it goes with you to your next job. Some other incorrect ideas remain in the minds of many, wherein persons believe they have no say in how their money is invested. Trade-wise, one person can indeed select among funds intended for different levels of risk and time to retirement.
How to Make the Best Use of Your MPF Contributions
Increasing the amount of your MPF contributions can do wonders for your retirement savings. Take a step back and analyze the current statutory contribution rates; then, if possible, dial in higher than the minimum required by law. Another excellent method consists of automatically deducting from your salary to contribute to your MPF, giving a sense of security that contributions go through every month without fail.
Being invested in various funds within the mpf scheme yet another worthy strategy. Different asset classes behave under different market conditions in many ways; hence, diversification can limit the downside risk on your portfolio. Do keep monitoring your investment choices. Maybe with the close approach of the retirement age, more resources might be directed toward low-risk investments to help guard the savings from market volatility. Follow up on all regulation issues that appear related to the MPF system; being knowledgeable will help you in implementing better financial decisions concerning your future.
The Role of ORSO in Retirement Savings
The purpose of ORSO or the Occupational Retirement Schemes Ordinance should be very well understood by anyone planning retirement savings in Hong Kong. Unlike MPF, which is mandatory on the part of employer and employee contributions, the ORSO schemes are usually voluntary and meant to be more flexible on benefits. Thus, they would be attractive schemes for the high-income earner or self-employed individual who wants to augment their required contributions.
ORSO plans provide a wide possibility, such as one that implements defined benefits or one that implements defined contributor types of plans. This provision allows participants to customize their retirement strategy based on personal financial goals and circumstances. Many employers also contribute substantially to those schemes, which increases the potential retirement income. Combining both MPF and ORSO in your overall retirement plan adds some more solidity to the financial future. One should carefully weigh his work situation and how much he can afford to save through each system. Experts, such as those involved in the MPF Education Series by Sun Life Hong Kong, will give you useful insight to help you to cope with options.
