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Creating a retirement plan

Retirement can be an exciting phase in your life – and the earlier you start planning, the more options you’re likely to have when you get to it.

At its core, retirement planning is about setting aside money today to use in the future when you have no active employment or business income.

It can be complex with lots to consider, which is why many people put it off. But once you start the conversation, it becomes easier.

A robust wealth plan and investment strategy are essential elements to building a retirement fund that will support your quality of life, protect what’s important to you and let you achieve your goals.

Of course life is unpredictable and your goals may change, so once you create a plan, it’s important to revisit it at regular intervals.

The 3 phases of retirement planning

It can be useful to split retirement planning into 3 phases. These are:

  • Accumulation of savings or preparing for retirement
  • Your transition to retirement
  • Living in retirement

Accumulate your savings

In the accumulation phase you’re earning income and building up your retirement savings. If you haven't crystalized your vision of retirement yet, that’s fine. A good place to start is with these 3 questions:

  • When do you want to retire?
  • How much do you need when you retire?
  • What do you need to do now?

It may help to write down the answers. Even if your picture of retirement is light on detail for now, the key to a successful accumulation phase is having the discipline to set aside a portion of your income for future retirement benefits. You should also make sure you’re taking advantage of the preferred treatment of retirement accounts for the power of compounding to grow your funds.

Here are some of the elements to consider during the accumulation phase:

  • Retirement accounts

    There are many different retirement plans available which take advantage of the power of compounding and provide tax and saving incentives. Common retirement accounts in the U.S. such as 401(k), 403(b) or Individual Retirement Accounts (IRAs) support saving and building for retirement.


    When choosing the retirement account that’s best for you, it’s critical to understand how the different options differ based on:


    1) timing of when the assets in the account are taxed

    2) plan contribution limits; and

    3) if the account is sponsored by your employer, or not


    For a summary of different types of retirement accounts and how to identify which best supports your financial goals and needs in retirement, see our guide on Which retirement account is best for you.

  • Investing

    Investing your retirement savings gives them the potential to grow and is a way to make money work for you. It’s vital to have an investment strategy based on your objectives and life stage. Investment strategies can be tailored and altered to meet your changing needs. You can also be as involved or as hands off as you wish to be.


    All types of investments are subject to market volatility, so it’s possible you’ll get back less than you put in. Our Wealth Relationship Managers can help you create an investment strategy that works for you.

  • Succession planning and asset structuring

    The accumulation phase is an ideal time to put your succession plan and asset structure in place. Having a will, life insurance, durable power of attorney and medical power of attorney are often staples of every succession plan.

Transition to retirement

Not everybody has a hard stop into retirement. Some may prefer a gradual transition.

This could mean part-time work, for example, as you slow down and ease into retirement. By this stage, you’re likely to have a clearer idea of your desired lifestyle, location and the associated expenses.

As you transition to retirement, you’ll still be earning income or running your business, but gradually replacing your working hours with other activities. It’s important that your investments are working hard for you and that they’re consistent with your retirement objectives and aligned to your future liquidity requirements. 

Life is uncertain. So, if you haven’t already, this is the time to take stock of any succession planning and asset structures that you have in place. This includes updating your will, which is often overlooked.

Generally speaking, the more comprehensive and well-documented your succession plan is, the easier it is to execute when needed.

Live in retirement

Retirement can be a golden period where you’ve earned the freedom to do what you want, when you want. This is when you transition from saving to spending.

Generally, your retirement fund will no longer grow at the same pace as it did during your accumulation phase. So it’s important to closely monitor your spending and your retirement fund balance. 

Maintaining your retirement funds in a sustainable way without impacting your quality of life or legacy plans is typically a key focus during your retirement phase.

Investment strategy management remains fundamental to ensuring your retirement funds will be sufficient to meet your needs for the rest of your life. You should also have a buffer within your budget to allow for unforeseen cash outflows, such as medical costs.

HSBC planning solutions

At HSBC we work with families and individuals globally on their planning needs. With experts on the ground in key markets around the world, we’re continuously monitoring new developments, opportunities, and changes that may impact your retirement planning.

Get in touch with your Wealth Relationship Managers to explore how we can help you and your family to plan for the future.

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