What should I Do with My MPF Accrued Benefits when I Retire?
Three Ways to Manage Your MPF Benefits when You Retire
Under the MPF System, once you reach the age of 65, you can choose any one of the following ways to manage your MPF benefits (including the MPF benefits generated from the mandatory contributions and the tax deductible voluntary contributions):
- 1Withdraw your MPF benefits by instalments
- 2Withdraw all your MPF benefits in a lump sum
- 3Retain all the MPF benefits in your account for continuous investment
Trustees are required to process free of charge* withdrawals for the first four instalments of a scheme member in a year. If you intend to withdraw your MPF benefits by instalments, you should contact your trustee to find out more about the withdrawal arrangements before making an application.
*Other than necessary transaction costs which are incurred, or reasonably likely to be incurred, by the trustee in selling or purchasing investments in order to give effect to the payment; and payable to a party other than that trustee.
Factors to Consider and Points to Note
Please pay attention to the following points before making a decision on how to manage your MPF benefits:Consider your personal needs
Think about the amount of assets you may have and the amount you will need when you retire. For instance, ask yourself whether you need money immediately to cover your daily expenses or for other purposes. MPF is only part of your retirement assets, so you should plan for your retirement well by considering your MPF together with any other retirement savings you may have.Learn more about the operation of MPF funds
MPF invests in funds. Fund prices change due to market fluctuations, and this can affect the value of your MPF assets. After you have filed a withdrawal application, your trustee will sell the fund units in your account at the current market price and pay you the relevant amount. However, the price obtained when the trustee sells your funds may be different from the price prevailing when you submit your withdrawal application.Find out the withdrawal rules of voluntary contributions
Withdrawal of MPF benefits derived from voluntary contributions is subject to the governing rules of the scheme concerned. If your account includes voluntary contributions, you should check the relevant MPF Scheme Brochure, or contact your trustee for the withdrawal rules of voluntary contributions.Be aware of the conditions associated with a Guaranteed Fund
If you have invested in a Guaranteed Fund, you should check whether withdrawal in a lump sum or by instalments will result in the failure to fulfil certain qualifying conditions, such as the minimum investment period. This could make you ineligible for the guaranteed returns. Please contact your trustee for details.Review your investment portfolio
Remember that any MPF benefits you do not withdraw will be retained in the account for continuous investment. You should therefore regularly review your investment portfolio, and consider whether you need to make any adjustment.
Regardless of whether you choose to withdraw your MPF benefits by instalments or retain them all in your account, any benefits you do not withdraw will continue to be invested in your chosen fund(s). The values of these assets may change due to market fluctuations, and you should be aware of the investment risks involved. In addition, your account will, as usual, be subject to management fees and other charges by the trustee based on its total asset value.
Early Withdrawal of MPF
Under the law, there are specific circumstances where accrued benefits may be withdrawn before you reach age 65. They are:
- Early retirement
- Permanent departure from Hong Kong
- Total incapacity
- Terminal illness
- Small balance
- Death
Click to learn more