Information Centre

In our previous article, we discussed how managing your MPF is like playing a video game. Once you master the game strategies, progressing through the levels becomes much easier. We introduced three key strategies for MPF management and encouraged scheme members to plan for retirement as early as possible. In this article, we will share the remaining strategies, with the hope that everyone can apply them and take a more active role in managing their MPF.

Strategy 4: Tax-deductible voluntary contributions

Some video games include optional side quests players can choose to take on for extra experience points to level up their characters and better prepare for future challenges. The idea of voluntary participation and gradual enhancement is similar to tax-deductible voluntary contributions (TVC) under the MPF System. Scheme members can choose to make TVC during their working years to boost their retirement reserves, while enjoying tax deductions. With side quests in a game, players can flexibly decide whether to take part based on their pace and strategy. TVC offers the same kind of flexibility, allowing scheme members to decide on the frequency and amount of TVC based on their financial situation, life stage and retirement goals.   

Strategy 5: MPF accounts consolidation 

Throughout their careers, employees will inevitably switch jobs, which usually results in a new MPF personal account. If these accounts are not properly consolidated, the number of personal accounts will increase, making it more challenging to manage their MPF. Players in a video game take stock of their resources at the end of each round to optimize their strategy for the next stage. Similarly, we encourage scheme members to consolidate their MPF accounts whenever they switch jobs. For example, they can transfer the MPF they accumulated at a previous employer into the contribution account set up by their new employer or consolidate multiple accounts into a single personal account for easier management. This will provide them with a clearer picture of their overall investment status and fund performance, helping them devise a more comprehensive and effective retirement investment strategy.

Strategy 6: Retirement planning 

In video games, as players progress to more advanced stages, they accumulate a range of equipment, resources and skills. At this point, strategic planning becomes essential to prepare for the challenges ahead. This mirrors the experience of retirees managing their MPF. After years of building retirement reserves, determining how to effectively use existing assets to ensure financial stability to cope with the challenges of retirement becomes a key to financial stability in retirement life. After retirement, scheme members should first assess their personal savings and living needs before deciding whether to withdraw their MPF by instalments or in a lump sum, or by leaving it in the account for continued investment. If they opt to keep the MPF in the account for further investment, it is essential to understand the fund terms and regularly review the fund portfolio to avoid pitfalls.

Just as players in a video game must carefully manage their resources to maximize their character's potential in the later stages, retirees should regularly review their MPF investment status and adjust their strategies as needed. This proactive approach will strengthen their finances and enable them to embrace this new stage of life with confidence.