Periscope

Plan for a rich future

Ageing population

The population’s median age has risen from 34 in 1996 to 39 in 2006 because of continuing low fertility rate and mortality improvement, according to the figures from last year’s by-census released in late February.

The Census and Statistics Department predicted that by 2033 the number of those aged over 65 would account for 27 per cent of the population.

A now 22-year-old fresh graduate from university will turn 48 by that time and will still be working and paying tax to the government.

His financial burden would be heavy because by then every two taxpayers would have to bear the social welfare cost of a retiree.

Financial liabilities come with age. “It only gets harder to have some money to spare for saving when you get older,” said Carrie Lee Kah-kit, associate director of Convoy Financial Services Ltd. She said young people should identify the foreseeable financial burden earlier, rather than later.

“The Chinese values are predominant in the financial culture of Hong Kong. We avoid burdening the society by claiming social benefits, hence financial planning needs to start at an early age for securing future independence,” Ms Lee said.     

The rising life expectancy resulted from higher living standards, meanwhile, is also adding to the financial pressure. Though longevity is celebrated in the Chinese culture, longer lives mean additional years of retirement.

Hong Kong’s life expectancy was over 84 years for women and 79 years for men in 2004.

Again, if a now 22-year-old fresh graduate lives till the age of 85, she then has 43 years to save her 20-year retirement before she stops working, given that she starts saving immediately after she has a stable income. 

However, young people nowadays tend to spend more and save less, making the financial planning and preparation a pressing challenge.

Youth financial problems

A survey on young people’s spending behaviour conducted last September finds that 70 per cent of about 1,100 respondents aged 14 to 25 overspent during the past summer vacation.

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Kenny Tang Sing-hing says financial planning always comes first.