5 Signs you are not ready to retire

And one reason to keep working

Imagine one day waking up and realizing you DON’T have enough money to retire.  That’s the scenario faced by many retirees and soon to be retirees. In industry jargon this savings short fall is called “underfunded”.  For some it may be too late, but for many, some simple lifestyle changes will assist minimize the savings shortfall.  In future articles we will share what some of those savings strategies, but today, let’s examine how we got to this situation in the very first place.

There are many reasons for the anticipated savings shortfall. Firstly, we are living longer than ever before. Today Hong Kong has a life expectancy of 85 years, almost 20 years longer than in 1960. Living longer is good news, but associated living and healthcare costs are rising and need to be covered. Secondly, where there had been some sort of retirement protection, either through generous Defined Benefit pension schemes, or state sponsored pension arrangements, these safety nets are gradually being dismantled, placing the onus on individuals to save for their own retirement.

Simply put, retirement now means saving, and positively, saving is something in an individual’s control.  By saving early and saving now we have the ability to control our retirement outcome. Control is key to ensuring one’s retirement is well funded and not “underfunded”.

Each week we discuss one of the 6 clues that you are not yet ready to retire and may be underfunded:

  1. Problems Paying Bills
  2. Retirement Worries You
  3. High Level of Debt
  4. No Long-Term Financial Plan
  5. Portfolio not rebalanced
  6. You still love your job!

There’s nothing that says you have to retire just because you’ve reached the definition of full retirement age. Just look at Hong Kong’s Sir Li Ka-Shing, who’s still working at almost 91 years of age and has no plans to retire. He does it because he loves working —not to pad his billions in net worth. If you’re excited about getting up and going to work in the morning, keep doing it.

Working has benefits beyond the financial. A job you enjoy engages your mind, offers social interaction, gives your days purpose, and creates a sense of accomplishment. All of these things can help you stay healthy and happy as you age. You also might be able to stay on your employer’s health plan and possibly get better coverage than you would through Medicare.

If still uncertain, make sure you speak with your financial adviser, or visit sunlife.com for assistance. Mympfchoice.com also provides handy assistance to help you with your MPF.

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