Could savings alone guarantee you a worry-free retired life? 5 things to do before age 45 for your retirement

Could savings alone guarantee you a worry-free retired life? 5 things to do before age 45 for your retirement

Could savings alone guarantee you a worry-free retired life? 5 things to do before age 45 for your retirement



5  Mins Read

As life expectancy increases, would it be ironic that we still have to make a living during our retired years? In face of all the uncertainties in life, could your savings really save you from accidental disability or dementia after retirement? To maintain your current standard of living through retirement, here are 5 things you should do by age 45.

1 - Work out how much money you need after retirement

The longer we live, the longer our retired life or second life would be. Whether you want to travel around the world or chase your dreams in your second life, you need to plan ahead. How much money are we talking about? Some experts believe we need 25 times our annual expenses saved across cash and investments. Others suggest that it should be 167 times our monthly salary before retirement if we want to keep the same living standard going.

To prep for your golden years financially, there are quite a few options apart from normal bank savings and fixed savings plans – the government-recognised qualifying deferred annuity polices (QDAP). They offer a tax-deductible limit of up to HK$60,000 annually^, one of the product features the working class would buy into.

2 - Increase passive income after you retire

Over the tens of years of retired life, illnesses or even death are just two of the variables that savings may not be able to smooth out. Therefore, this could be the right time to pick a QDAP, when you are still young, to start your savings and passive income.

AXA’s IncomeEnrich Deferred Annuity Plan, for instance, offers you both a steady stream of guaranteed monthly annuity payments, but also the upside potential returns - the non-guaranteed monthly annuity payments. In addition, the premium payment term could be as short as 5 years, and the annuitant could start to receive the monthly annuity payments as early as age 50* for up to 20 years. This means you can enjoy the double benefits of wealth management during your work life, and stable income during your retired life. In case you’re laid off, you would be covered by an extended premium payment grace period of up to 365 days, relieving your family’s financial pressure in no time.

3 - Maintain a healthy way of living

While financial health is crucial after retirement, physical health is equally important. Our body functions decline as we grow old, so in order to enjoy a healthy retired life, it’s imperative that we develop a healthy way of living such as doing exercise, having sufficient sleep, quitting smoking and alcohol, and doing regular body check-ups.

To further secure your health after retirement, a QDAP can also help. Make sure you look for those with additional protection for accidental injury, or you may end up in policy lapse due to zero income the time you stay in the hospital and/or rehab centre, causing more problems to your retired life. For IncomeEnrich, if the annuitant suffers from total disability in an accident before age 65 for a continuous period of at least 6 months, all premiums under incomeEnrich attributable to the period of total disability  will be waived . Also, if the annuitant  is diagnosed with Severe Dementias, he or she will be paid a lump-sum death benefit in advance, the dementia advance benefit.

4 – Develop your interests

Even if you don’t have to shoulder any financial burden, you still have to plan out your retired life when every day becomes a holiday. You may want to travel but how many trips could you take when travel expenses are always on the rise? A better plan is to develop an interest while you’re still young, such as playing a musical instrument, photography or tea savouring, to enrich your 2nd life.

5 – Make new friends outside your workplace

We spend a lot of time working and many of our friends are actually our colleagues. Once you retire, you may lose contact with most of them. This is also the time when your grown-up children move out to build their own family. With fewer friends and relatives around you, it is important to revitalize your social life by making new friends and meeting old schoolmates on a regular basis.

To conclude, a comprehensive QDAP not only offers you financial freedom after retirement, but also different yet down-to-earth coverages during difficult times, including pre-paying benefit for Severe Dementias and an annual tax-deductible limit of up to HK$60,000^. Click now to learn more about AXA’s IncomeEnrich Deferred Annuity Plan

^ For eligibility of tax deductions or any tax related enquiries, please refer to the Inland Revenue Department (IRD) website or contact the IRD directly.

*Only applicable to policies with issue age of 18 - 40.