Navigating the Flexible Retirement Era with Confidence

The latest HSBC A Quality of Life Report 2025 revealed that nearly half (47%) of more than one thousand affluent investors surveyed plan to take a “micro-retirement” before fully retiring. This aligns with the findings of T. Rowe Price recent Hong Kong Retirement Survey¹, signaling a clear shift: retirement is no longer a passive “wait until the time comes” event, but a flexible, long-term journey filled with possibilities. Along this journey, investors must balance asset growth, risk management and the creation of sustainable cash flow. While each person’s path to an ideal lifestyle will differ, clarifying three key questions—at any life stage—can help strengthen confidence in achieving one’s goals.

The three core questions are simple: 1. Do I have enough savings? 2. Is my asset allocation appropriate? 3. Am I using the investment approach best suited to my goals? It is important to treat this as a framework to revisit and refine regularly throughout life. Doing so helps ensure your financial plan remains resilient amid market volatility and life changes, keeping you on track toward your retirement aspirations.

Retirement Planning Priorities by Life Stage

In the early career stage (ages 22–39), it is essential to establish consistent saving and investing habits early, with a clear focus on retirement goals. Major life milestones, such as marriage or starting a family, can serve as opportunities to align shared financial objectives and increase the savings rate. Asset allocation during this period can be more “growth-oriented”, with a longer investment horizon allowing retirement portfolios greater exposure to equities to capture long-term growth potential. Investors can also benefit from features such as automatic contribution increases in retirement contribution plans to steadily raise their savings over time.

In the mid to late career stage (ages 40–59), earnings typically peak, making this a critical time to assess retirement readiness. As a reference point, by age 45 total savings should roughly equal three times annual salary, rising to around five times by age 50 (including investment gains). These are not strict targets, but useful benchmarks. If there is a shortfall, consider increasing the savings rate, extending your working years or optimizing asset allocation to close the gap. While equities remain the primary engine of growth, gradually increasing bond exposure can help reduce the risk of major market corrections as retirement approaches. Maintaining an emergency fund covering three to six months of living expenses is also prudent to avoid forced liquidation of long-term assets during unfavorable market conditions.

For those approaching or already in retirement (age 60 and above), the focus shifts to “sustainable withdrawals”, which involve reviewing total assets, consolidating all income streams such as annuities and the Mandatory Provident Fund (MPF) and establishing a withdrawal plan. If adequacy remains a concern, deferring retirement by a few years can significantly improve outcomes. Portfolios should take a more balanced stance—stable yet maintaining some growth potential—with approximately 30%–50% in equities, 40%–60% in bonds and a modest allocation to cash for short-term expenses and volatility management. After age 70, equity exposure can be reduced further, though retaining a portion in growth assets remains important to offset inflation and longevity risks.

A Transparent Framework for Retirement Asset Allocation

Balancing multiple priorities across life stages can be challenging. This is why the “retirement glide path”, a proven approach widely adopted in developed markets such as the United States, can serve as a valuable reference for Hong Kongers. It provides a transparent, disciplined and flexible framework, with strategic asset allocations that automatically adjust according to preset rules as individuals progress through different phases of life.

Ultimately, building confidence in retirement planning is not about waiting for the perfect moment or relying on complex investment strategies. It begins with setting clear goals, cultivating consistent saving habits and making timely adjustments to your investment approach. As more people in Hong Kong opt for flexible retirement models, the “retirement glide path” serves as a clear roadmap toward diverse retirement objectives, with a well-defined adjustment framework that helps investors stay on course even amid market turbulence. We believe this approach can empower Hong Kong investors to move forward with greater confidence and steadily progress toward the retirement life they envision.