1. Wind the clock to 30 years out
Those buying pension-type insurance truly care not how much the account grew this year, but how much is inside on the day I draw, 30 years later. This piece skips the sentiment and places the two tools at the same starting line, running the 30-year long cycle.
Assume: RMB 100k equivalent invested yearly for 10 years, withdrawals starting year 20.
Tools showing no gap short-term often end worlds apart at the 30-year mark.
2. The mainland annuity's curve
The mainland annuity's character is crystal clear: extremely high certainty. The pricing interest rate is written into the contract (currently capped at 3%), and you can calculate today the year-30 account value and annual payout. It's stable, but its ceiling is set by a single market's rate — in a rate-down cycle, that ceiling keeps dropping.
For those extremely averse to volatility who keep funds domestic, it's a qualified "pension base."
3. The Hong Kong savings policy's curve
Hong Kong savings insurance grows cash value slowly early (the first 10 years are basically the "break-even" phase), but after year 15–20, the compounding curve steepens sharply. With dividends, the long-term IRR reaches 6%–7%; combined with multi-currency and flexible withdrawal, the year-30 account size and drawable amount usually significantly exceed the mainland annuity at the same input.
The cost: illiquid early, dividends not guaranteed, funds must go offshore.
4. Where does the gap come from
The core difference is still the investment scope. Mainland annuities invest domestically; returns are capped by the local-rate ceiling. Hong Kong savings insurance invests globally; historically fulfilled long-term compounded returns are higher. The longer the time, the more obvious compounding's "exponential effect" — 30 years amplifies not 3x but orders of magnitude versus 10 years.
5. A rational division-of-labor suggestion
We don't advocate "either/or." The more reasonable approach:
- The "floor" of pensions → mainland annuity, locking certainty
- The "growth" of pensions → Hong Kong savings insurance, chasing long-term compounding + USD assets
Use the mainland product to hold the floor, Hong Kong insurance to raise the ceiling. You won't be spooked by volatility, nor find at year 30 that "you only barely beat inflation."
The essence of pension planning is leaving two paths for your future self: one stable, one long.
6. In closing
The you of 30 years from now will thank the you who chose right today. Hong Kong insurance and the mainland annuity aren't enemies; they solve different pension layers. See where the endpoint differs, and you can place every input of today in the right place.