Voluntary contributions boost retirement reserves — an MPF calculator can size up what you’ll need

After attending his company’s MPF seminar, Ah Cheuk grew keen on “voluntary contributions” — extra contributions by employers or employees on top of mandatory ones, aimed at building bigger retirement reserves. But how much extra each month is enough?

How can you estimate your retirement needs?

The MPFA website’s MPF calculator takes your inputs — years to retirement, expected monthly spending in retirement, life expectancy, expected post-retirement investment returns and average inflation — to project your retirement needs. Then project your accumulated savings and assets at retirement, including MPF accrued benefits, to judge whether they suffice — and whether extra saving or investing is needed.

What’s good about voluntary contributions?

MPF pools contributions from many members for investment, delivering cost efficiency; the huge fund scale allows investment across products, aiding diversification. Contributing regularly in fixed amounts also harnesses dollar-cost averaging, softening the impact of short-term market swings.

What should you consider before contributing voluntarily?

Every investment product has its merits — choose what fits your personal investment goals and risk tolerance. Those thinking of starting can use retirement-planning resources to assess their needs and compare MPF funds first.