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Information required for retirement calculation

To calculate the money required for retirement, we need the following information:

    1. Expected investment rate of return during retirement - normal the selection is at low risk investment products with IRR(internal rate of return) within 5% (safe products)
    2. Expected inflation rate - past 30 years inflation rate and the average inflation rate can be found in inflation rate blog
    3. Monthly expense during retirement at today's value
    4. Number of years to retirement
    5. Number of years for retirement
    a. Estimate from life expectancy blog
    b. Base on your family history average life expectancy
    c. Take the higher value from 1 and 2.
    6. Amount to leave at the end of retirement at today's value

Posted By: Kenneth Yu Category: Saving Date: 10 May 2014

What is the life expectancy in Hong Kong?

Below table and chart shows the life expectancy in Hong Kong from 1981 to 2011.

Year Male Female
1981 72.3 years 78.5 years
1985 74.1 years 79.4 years
1991 75.2 years 80.7 years
1996 76.7 years 82.7 years
2001 78.4 years 84.6 years
2006 79.4 years 85.5 years
2011 80.3 years 86.7 years

Source: Demographic Trends in Hong Kong 1981-2011

By using Linear Regression, the life expectancy at a certain year for male and female can be estimated by the following formula:
Male = 0.27 x year - 462.29, i.e. increase 0.27 each year
Female = 0.2907 x year - 497.68, i.e. increase 0.2907 each year
Example:
Male at year 2020, the life expectancy will be 0.27 x 2020 - 462.29 = 83.1 years
Female at year 2020, the life expectancy will be 0.2907 x 2020 - 497.68 = 89.5 years

Posted By: Kenneth Yu Category: Saving Date: 9 May 2014

What is the inflation rate in Hong Kong?

Below table shows the past 30 years inflation rate, the average inflation rate is 4.52%, thus selecting 4.52% as the inflation rate is a good estimation.

Posted By: Kenneth Yu Category: Saving Date: 8 May 2014

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Information required for retirement calculation

Update on: 10 May 2014

What is the life expectancy in Hong Kong?

Update on: 9 May 2014

What is the inflation rate in Hong Kong?

Update on: 8 May 2014