After almost 3 years, Hong Kong is going to start reopening border with Mainland China very soon. It is anticipated that the reconnection will facilitate the population mobility across the border again. If you are thinking about retiring in the GBA, here are some points for your consideration.
To retirees, or retirees to be, there is no doubt that the most attractive factor is lower living cost in Guangdong. Yet there are five key factors you should consider before moving to the GBA, namely Social Security, MPF/Pension Arrangement, Medical/Healthcare, Financial Planning and Tax Planning.
Hong Kong’s social security assistance or insurance schemes are different from those in Macau and Mainland China in eligibility and format. Local citizens should ensure their current schemes are portable.
If local citizens plan to retire in the GBA with their MPF, which is designed to fulfil retirement needs in Hong Kong, they have to consider the difference in living standards, medical expenses and exchange rates.
Upon reaching retirement age, employees can withdraw their MPF benefits in different ways, or keep a sum for ongoing investment. The current cross-border MPF contribution / withdrawal arrangements are not well developed yet.
The demand of high-quality accommodation and elderly care must rise as more middle-class Hong Kongers retire in the next 10 to 15 years. Yet their supply must meet up with the demand.
For Hong Kong retirees residing in the GBA, among the main sources of their funds, only their MPF distributions are not subject to China Individual Income Tax (IIT). Plus, their taxpayer status and the length of residence in mainland actually affect the amount of IIT.
The GBA certainly has its edge as a retirement destination. Yet, the portability, transparency and cross-border connection of social security schemes and pension arrangements, so as the healthcare standards and financial incentives should be enhanced. We hope the relevant authorities can facilitate the transformation of the GBA to be an ideal retirement destination to reassure Hong Kong citizens who are interested in retiring there.