Guide for MPF Withdrawal Before Leaving Hong Kong

Guide for MPF Withdrawal Before Leaving Hong Kong

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How Can I Conduct MPF Withdrawal Before I Leave Hong Kong?

Do you have a plan to leave Hong Kong permanently and you are looking for some tips on how to make your mandatory provident fund (MPF) withdrawal? If yes, it means you’re at the right spot. In this article, we will guide you through the process of withdrawing your MPF and the support you need to leave Hong Kong for good.

What Is the Mandatory Provident Fund (MPF)?

In 2000, the Hong Kong government established the MPF which is a mandatory contribution scheme whose purpose is to encourage people to put money into their retirement in order to prepare for their life after retirement. The employees as well as the employers are required to pay a certain amount of their salary into an MPF scheme which is registered by an MPF provider.

The MPF not only is the main component of retirement planning in the Hong Kong SAR but also serves as a decent retirement benefit provision. That is designed in order to help individuals earn their retirement income by assuring them of periodical payments in their old age. This is a compulsory scheme in which both the employers and the employees between 18 and 65 years of age contribute to the fund.

One of the outstanding advantages of the MPF is that it offers a tax-efficient approach to planning for retirement. The contributions made by the employer and employees are tax-deductible meaning that individuals can have their taxable income reduced and save money on their taxes.

In addition, another advantage of the MPF is the fact that it can be moved with ease. In short, if the employees change jobs, they can still keep the MPF account with their new job. This ensures that people will be able to keep on saving for retirement in case they switch jobs frequently in their careers.

It is essential to recognize that the MPF is not a guaranteed pension income. An individual’s retirement income will depend on a number of factors such as contribution amounts, investment performance as shown by the fund and the charges from MPF operators.

Generally, the MPF constitutes an important component of the retirement planning system in Hong Kong. In addition to being a tax-efficient vehicle for saving for retirement, and being transferable, the MPF assists individuals in maintaining a pattern of saving for retirement throughout their careers.

Can I Withdraw My MPF?

With the MPF scheme, you can pick from certain options for withdrawing your money but you should strictly follow some rules and regulations to withdraw your money in the right circumstances.

If you are 65 and above you can easily access your MPF without any restrictions. The reason for it is that the MPF scheme was tailored to be a retirement benefits program to Hong Kong residents and the ones who have reached the age of 65 are perceived as to have retired.

If you are under 65 years old, there are a number of factors which may allow you to withdraw your MPF. One such case is immigration for permanent residence in Hong Kong. This might be related to the fact that you are a person who is going to be relocated to another country or someone who is going to spend the rest of his/ her life in a foreign country.

The other condition is that you can withdraw MPF when you are diagnosed by a terminal illness. For this situation as well, you may qualify to draw your MPF to pay for the cost of your treatment.

It is worth highlighting here that if your MPF is withdraw earlier than at the age of 65, you may have to pay early withdrawal fees and taxes. This is so that the MPF plan is designed in such a way that savings are encouraged and withdrawing money early is against the policy.

Also, if you have any overdue loans or debts, your creditors may have a legal right to withdraw a certain portion of your MPF assets to pay the debts. This is another thing to consider when you are going to take the withdrawal from your MPF.

Consider your situation thoroughly and weigh the possible consequences before you decide to withdraw your MPF. It may even be better for you to keep your MPF funds and let them grow longer until retirement age.

Early Withdrawal MPF

During a MPF early phase out, it’s imperative to show through papers that you are about to leave Hong Kong for good. This may be due to a variety of factors including retirement, permanent relocation to another country, or when termination of employment. You should provide this evidence as it is asked for by the authorities if you want to receive your funds from your MPF account before time.

Retirement is an important event for everyone, and the process of preparing for it must be carefully managed. Many people try to retire just to see how happy they can be during the golden age, to travel around the world, or to spend more time with their loved ones. But obviously, retirement can be a tricky period, from the point of view of financial planning, when you don’t have any security yet. Taking an early withdrawal from MPF can grant you the financial comfort you deserve to live your retirement the way you have dreamed of with financial security.

Permanent immigration is another matter that your MPF contributors could use to withdraw the funds. Leaving one’s homeland and moving to a new country might be the most thrilling thing you have done in your life, but it can also be extremely stressful and scary. You will be required to make your plans and find job in your new home country as well as adapt to new culture. Through the early withdrawal of your MPF you will be able to get the support you need with the financial burden of moving to a new country and starting a new life.

Termination of employment may be a painful experience but it may seriously affect anyone. Being without a job is very difficult especially when you have to pay off some loans or feed your family. Early withdrawal of MPF funds can help you temporarily until such time that you secure a new job.

However, if you are still with a job and willing to withdraw your MPF fund early, you’d have to prove that you are experiencing financial hardship to be qualified. This can happen due to a terminal illness, a failure in business, bankruptcy, or just a person being unable to meet the monthly bills.

When a terminal illness happens, patients often experience overwhelming devastation. It can be emotionally and mentally draining not just for you but also for the whole family particularly when you’re the sole breadwinner of the family. You can use the withdrawal of your MPF which will be there to help you pay for medical bills and the financial needs of your family during this difficult time.

Bankruptcy is a situation one would not wish to be in and unfortunate circumstances are sometimes real. Job loss, medical bills, and overspending may become the reasons leading you through this path. It is possible for you to plan to get your MPF funds in order to get back in the saddle and begin rebuilding your wealth.

If you miss your bill payments moderately, it can lead you to the stage where you are in financial difficulties. It may result from the cost of living expenses, unexpected bills, or revenue decline. Postponing the use of your MPF funds can help you overcome these costs and grant you enough capital to gain some relief.

When Can I Get The Money After MPF withdrawal?

If you are eligible to redeem your MPF, generally, your money will be given back about a few weeks later after you have applied.

On the contrary, there are several factors that is associated with the timeline for receiving your MPF funds. One of the innumerable factors that you may consider is the withdrawal method that you would select. If you use the bank transfer method, it can take several days for the funds to become available in your bank account.

The other important aspect to note is the variety of MPF accounts that you hold. The fund may not be available for withdrawal if you already have the preserved account. You would have to wait until you turn 65 years old to access your funds.

You should also be aware that choosing to withdraw your money may result in additional charges added by your MPF portfolio manager for the handling of your withdrawal decision. This fee typically tends to cost differently if you are withdrawing a large amount of money or the withdrawal provider is different.

Before you submit your MPF withdrawal request form, it’s suggested that you consult your provider to find out if there are any additional requirements or fees that you should take note of.

How to MPF Withdrawal From HSBC?

It is a simple process of accessing your HSBC MPF account either online or by visiting the branch office near you.

To MPF withdrawal online, you just need to be in possession of your account number and PIN. To complete it, you will be required to fill in the required functions and documents like an application for withdrawal and the tax withholding form. Finally, you will be ready to submit the application form, which you can do via the website as well. Following this, the money will be transferred to the bank account that you chose. Furthermore, it is important to take this period into consideration since an online withdrawal could take up to 10 business days.

Furthermore, if you want to personally take MPF withdrawal from HSBC Hong Kong branches, you have the option of being accompanied by the bank representative and filling out forms at the branch. Apart from that, you will be required to submit your ID card and your passport. The Banks’ representatives will lead you until the completion of the process and provide all the answers you might need. Once you have gone through the paperwork, then you will receive a confirmation email that will be proof of you withdrawing your refund request.

However, the MPF withdrawal fees might vary with the type of account you have, the amount of funds being withdrawn, and the duration of the withdrawal flow. You will need to check with HSBC or your account agreement contract for more details.

Besides, when you are planning to MPF withdrawal, you need to pay attention to your financial goals as well as needs. By closing your MPF in advance, the final price of the wager is decreased, and therefore you may miss out on any further profit. It is recommended to talk to a financial advisor and observe if withdrawing MPF is the proper thing to do to improve matters financially.

In short, the procedure for MPF withdrawal is not complicated, as you can do it physically or on the website of the bank. After you have completed the necessary documentation and ensured that you have all the identification documents, you will get your money within a short time. On the other end, you should consider what the fees are and the consequences of withdrawing before the due date would affect the overall loan amount.

How To MPF Withdrawal Before The Age of 65

1. Demonstrate your departure is for permanent reasons – with no desire to come back to work or reside

If you leave Hong Kong permanently, you need to produce a strong and reliable document which is going to prove that you’ll have no intention to return to the place for work or to stay for tax residency. Besides the tickets, you will also have to provide some other documents, like the termination of your lease agreement and your employment termination letter. FastLane can provide personal bookkeeping and ensure that your financial documents are filed correctly, so that you don’t have to worry.

2. Inform The Mandatory Provident Fund Schemes Authority

The next step is to notify the Mandatory Provident Fund Schemes Authority (MPFA) about your decision for early withdrawal your MPF. You will need to fill up the necessary form with the correct details, and then submit it to the MPFA office.

3. Submit tax returns

You will also have to file your tax returns at the Inland Revenue Department as this is an obligation that you have to fulfill. This goes without saying in view of the Hong Kong two-tiered profit tax rate.

4. Contact the MPFA directly to speed things up

The most direct way of accelerating the process of your MPF withdrawal is by contacting the MPFA. They assist you in going through the process and ensuring that you have done all the needful documents and forms.

Having acquired the relevant details, you should henceforth withdraw from MPF if you are leaving Hong Kong finally.

How FastLane Group Can Help?

FastLane Group can be your advisor when you are facing the hurdles of filling out your tax before MPF withdrawal. Our experienced experts will make sure that you will be able to maintain your accurate tax position. Contact us now!