According to recommendations from the World Bank, MPF is only one part of retirement reserve. As the life expectancy of Hong Kong people lengthens, MPF alone may not be sufficient to pay for all post retirement living expenses.
If the balances are left in the account for continued investments, members can benefit from the compounding effect and enjoy continued growth of their savings. For example if a member has HK$2.5 million MPF balance at retirement, withdrawal of the full lump sum will last the member around 13 years assuming HK$15,000 is spent every month while without accounting for inflation nor re-investment. If the member opt to withdrawal by instalments instead, taking out the same amount of HK$15,000 per month but leaving the rest in the account for continued investment, the entire sum will last the member up to 23 years – an additional 10 years (assuming 5% p.a. growth)!