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Where should we live? This is a common question that Hong Kong people ask themselves at various life stages, such as when they get married, have children and when they retire. Since property prices and rents in Hong Kong are sky-high, those who do not own a home may worry about their accommodation when in retirement. While becoming a homeowner in Hong Kong is rather difficult, renting does not give us a sense of security. If so, is it a good option to retire in the Mainland or overseas?

 

Tips from financial planners

Housing issues have remained a challenge for many generations of people in Hong Kong. Purchasing of overseas properties have become a hot topic in recent years. In fact, some people have chosen to retire in their native hometowns in Mainland China. For those who are planning to retire outside of Hong Kong like the Lees, they should consider the following:

Medical expenses

Hong Kong offers comprehensive medical services, and the public health service is comparatively inexpensive. If you consider retiring outside of Hong Kong, you should first understand the local medical services and charges. You should also think about the medical arrangements in the event if you fall ill abroad. For example, is it possible to return to Hong Kong for treatment? For your medical insurance, check the validity, limitations and restrictions of the policy coverage outside of Hong Kong.

Currency exchange and cost of living

To retire outside of Hong Kong, you have to consider the local cost of living and currency exchange rate. If the exchange rate of local currency is volatile, you may want to change the money at different times to mitigate the risk. Some people chose to retire on the Mainland because of the lower cost of living, but some of these major cities have seen a surge in cost of living in recent years. Higher prices, together with the appreciation of renminbi, can make retiring in the Mainland more costly.

Plan early

Leaving Hong Kong to start a new life on the Mainland or elsewhere requires thorough planning and a good understanding of the local environment, such as the economy, culture, transportation, healthcare, taxation and remittance systems and laws. It should not be a hasty decision.

For investment-based immigration, different countries will have their respective qualifications and entrance requirements. Not every countries will accept property investment immigration. If you intend to bequeath your overseas property to your family, you will need to understand the local estate laws and rules. For immovable assets including land and housing, the succession in general is governed by the laws of the place where the assets are located, which may be different from Hong Kong.

Supporting adult children to purchase property

Providing financial assistance to children to buy a home has become more common given the soaring property prices. First make sure you can comfortably afford to help without jeopardising your financial security. If it is more than you can afford, you have to be prudent as the decision will affect the quality of your retirement life which can last for many years.

 

25 April 2018