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The Hong Kong Mortgage Corporation Annuity Plan

A gist of the blog:

The Hong Kong Mortgage Corporation Annuity Plan (“The Plan”) was officially launched last week, providing another option of financial arrangement for the elderly. Under the Plan, retirees can turn part of their savings into life-long streams of guaranteed, stable and fixed annuity income.

The Plan is an insurance product that opens for application by Hong Kong permanent residents aged 65 years or above. The minimum and maximum premium is $50,000 and $1,000,000 respectively. The insured can immediately receive a guaranteed stream of fixed income after paying a single premium, and can continue to receive fixed monthly annuity payments even when he/she turns 100 years old or older. Therefore the Plan provides an annuity for lifelong income and the longer you live, the higher cumulative annuity payments you will receive. If there is an oversubscription of the Plan by the public, we are prepared to double the first tranche quota from currently $10 billion to $20 billion. You can find more details of the Plan at the designated website - https://www.hkmca.hk.

We have also proposed two initiatives in this year’s Budget to encourage citizens to make early planning for their retirement. Firstly, I have tasked the Insurance Authority to issue guidelines to assist citizens to identify and select suitable products on deferred annuity. Citizens purchasing these products meeting the guidelines can enjoy tax concessions. Secondly, for people who are making voluntary contributions into their mandatory contribution accounts for retirement use under the Mandatory Provident Fund, their relevant contributions can also enjoy tax concession. The maximum tax deductible limit is set to at $36,000.