Know Your Needs

MPF provides you with basic retirement protection. To manage your MPF investment, you have to set your investment goals first. These goals should be achievable and tailored to your needs. To do so, you need to contemplate the following:

• Set clear investment goals
  • Work out how much you would need, including all cost of living as well as medical expenses, to live on annually after retirement. Don't forget to provide for inflation, or else you can end up underestimating your actual needs.
  • You can live for as long as 20 or 30 years in retirement, so take that into consideration when setting your goals.

  Click here to calculate your retirement needs.

• Assess your own risk tolerance level
  • Factors such as age, personality, financial status of yourself and that of your family would all have to be considered when deciding how much risk you could tolerate with your MPF investment.
  • Generally speaking, if you can take more risks, you can consider a more aggressive investment portfolio which may yield higher returns, thus allowing you to achieve your goals sooner.
  
  
• Estimate your investment horizon
  • The longer your investment horizon (i.e. retirement is still a long way off), the higher your risk tolerance level will be, and as such, the more aggressive investment portfolio you can afford.
  • Conversely, if your investment horizon is relatively short, it will be more appropriate for you to choose an investment portfolio with lower risk, such as those that aim at preserving capital.
  
  
• Adjust your investment portfolio at different life stages
  • Your MPF investment horizon could span tens of years during which you would experience different life stages and face many changes. Reviewing and adjusting your investment portfolio at appropriate times could facilitate the achievement of your investment goals.

Manage your MPF investment

Your MPF investment could achieve better results and attain your goals more effectively if you review your portfolio at different life stages and make adjustments accordingly. The following are some important factors you need to consider when undertaking the review:

• The investment objectives, investment instruments and assets of the funds.
• Whether the proportion of different investment instruments is still appropriate.
• Whether the market risks of the funds are acceptable to you.

You can also draw reference to the fund's returns through the following:

• Annual Benefit Statements provided by trustees which list out the total amount of MPF contributions and accrued benefits in the year. In addition, trustees are required to issue at least two Fund Fact Sheets per year which set out such information as investment objectives of the funds, portfolio allocation, fund performance, fund risk indicators, etc.
• Fund unit prices published by MPF service providers in newspapers every month.
• Fund performance figures published on the website of the Hong Kong Investment Fund Association every month.

Remember, MPF is a long-term investment and you are advised not to change your portfolio frequently because of short-term market fluctuations, and that the past performance of a fund is no guide to its future performance.