Flexibly Withdraw Your MPF to Create a Steady Income in Retirement

Under the law, MPF scheme members can withdraw their accrued benefits once they reach the age of 65. However, data from the Census and Statistics Department reveals that Hong Kong is one of the longest-living regions in the world, with life expectancies of 82.5 years for men and 88.1 years for women. This means that retirement could span 20 years or more. Therefore, making the most of your MPF to support you through these long retirement years is crucial.

Typically, trustees are required to process at least four free installment withdrawals per year. If you don’t have urgent financial needs after retirement, you may want to consider not withdrawing your MPF all at once. Instead, take advantage of the flexible installment withdrawal option to "create your own long-term income," or even leave your MPF funds invested to continue growing within the plan.

Why Choose Instalment Withdrawals?

First, market fluctuations are inevitable. If the market is underperforming when you retire, a lump-sum withdrawal could expose you to short-term losses. By keeping your funds invested in your account, you can minimize the impact of a market downturn and wait for conditions to improve.

Second, instalment withdrawals offer greater flexibility. Your unwithdrawn MPF balance will continue to be invested, meaning your retirement savings could keep growing even after you’ve retired. This strategy allows you to take advantage of time and compound interest, potentially boosting your asset value.

Regularly Review Your Investment Portfolio

Instalment withdrawals also require careful consideration. Unwithdrawn MPF assets will fluctuate with the market, so it’s important to monitor your investment portfolio regularly and assess whether adjustments are needed. As you age or as market conditions change, your risk tolerance may shift, and you may need to adjust your fund choices to better suit your evolving needs.

Additionally, different MPF trustee may offer different instalment withdrawal arrangements. Before making any decisions, be sure to check with your trustee for the specifics of your MPF accounts.

Published date: 2025-02-28

Updated date: 2025-03-25

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