The “One Two Free” for creating lifelong retirement income

Lifelong retirement income

Many older persons are faced with this financial dilemma: Before retirement, they have little savings but a regular cash inflow, then after retirement, having some savings yet no cash inflows.

As the old saying goes, “save for a rainy day”. Many of us work hard to earn more before we retire, in order to have a comfortable retirement life. However, as the average lifespan increases, it is not unusual for retirees to live for a few more decades after they retire. So how much do you need to retire? Even if you have a substantial retirement capital, it is still a definite amount and will be used up one day. It is never a good feeling, or can actually be quite worrying, to see your savings go down day by day, with no sign of the situation reversing.

While many fancy a lifelong income like that of pensioners, very few of us are entitled to pension nowadays. Yet we can turn our assets into lifelong retirement incomes with certain financial products.

Two ways to have a lifelong retirement income

By the time we retire, we may have accumulated some savings, paid up a life insurance policy, and owned a property. These assets can in fact be turned into a long-term and steady monthly annuity income.

  • Annuities
    Annuities is a type of insurance products that turn capitals into a long-term and steady monthly annuity income. There are different annuity schemes in the market to meet the different money management needs. The HKMC Annuity Plan, Hong Kong’s first public annuity scheme, was launched in July 2018, providing a money management alternative to Hong Kong Permanent Residents aged 60 or above.

    Whether to use the retirement capital bit by bit, or convert it into a lifelong retirement income, are two vastly different money management approaches.


  • Reverse mortgages
    Under the Reverse Mortgage Programme of Hong Kong Mortgage Corporation Limited (HKMC), eligible homeowners can use his/her property as a security to take out a loan from the bank. The loan can be in the form of monthly annuity income over a fixed period of time or throughout the applicant’s entire life.

    HKMC also offers “Policy Reverse Mortgage Programme”. If the applicant and his/her life insurance policy are deemed eligible, he/she can use the fully paid-up life insurance policy as collateral for a monthly annuity income over a fixed period of time or throughout his/her entire life.


12 June 2019