The breadwinner’s concerns about retirement

Retirement planning
Family finances

It is no easy task being a breadwinner. Your responsibility to support yourself and your family would not come to an end when you retire. You also need to think about what sort of life your dependents will have should death or incapacity strike.


Tips from financial planners

While retirement planning is a personal matter, it is important to consider the needs of your family members, especially if you are the sole breadwinner.

Like Mr Cheung, breadwinners should consider getting financial protection and making early financial arrangements for their family members as part of their retirement planning. This will help to ensure that your dependent can have some financial protection should death or incapacity strike.

Pension payment options

Civil servants who are eligible to claim pension will receive a monthly fixed income during retirement until death. However, the monthly pension will cease when the pensioner passes away, and hence their dependent can no longer live on their monthly pension then.

If you have not saved up much for yourself and your family, you can consider apportioning certain percentage of your pension into a lump sum pension gratuity. The maximum commutation rate is 25% and 50% for pensioners under the Old Pension Scheme and New Pension Scheme, respectively. For details, please check the web page of the Civil Service Bureau. However, this comes with certain risks. For example, inflation will erode the purchasing power of your lump sum pension gratuity in the long run, and it will put the money at risk if you are not good with money. In addition, you will then have less amount of monthly pension.

Importance of insurance protection

For those who are the main source of financial support for the family, life insurance is an integral arrangement. When you pass away, or if you become incapable of supporting your family, a life insurance policy can offer financial protection for your loved ones. In addition, you can also purchase the necessary critical illness and medical insurance to lessen the financial burden on yourself and your family in case you become ill.

Enduring Powers of Attorney

Dementia is becoming more and more common. If you are worried that there will be no one to take care of your finances and wealth, then you should consider setting up an Enduring Power of Attorney and appoint an appropriate person to take care of and handle your finances when you are not capable of doing so.


25 April 2018