Life-Cycle, Income And Institutional Determinants Of Retirement Planning: Empirical Evidence From Bosnia And Herzegovina

This paper empirically examines the determinants of supplementary retirement savings planning among employed middle-aged individuals in Bosnia and Herzegovina, with a particular focus on the role of age, income, and institutional trust in the public pension system. Grounded in life-cycle theory and institutional economics, the analysis is based on survey data collected from a sample of 321 respondents and employs a binary logistic regression model alongside marginal effects analysis. The results indicate that age and income represent key determinants of supplementary retirement planning, with higher income levels significantly increasing the likelihood of long-term financial planning. The empirical findings further suggest that distrust in public pension system reforms increases the probability of individual engagement in supplementary retirement savings planning. A robust specification incorporating the interaction between age and income confirms the presence of heterogeneous life-cycle effects: age exhibits a stronger effect among lower-income groups, whereas for higher-income individuals, the probability of retirement planning remains persistently high even in earlier stages of the working life cycle. The findings have important implications for pension policy design in transition economies, suggesting the need for a combination of fiscal incentives, institutional reforms, and behavioral policy instruments to increase participation in supplementary retirement savings schemes. The paper contributes to the literature by identifying heterogeneous life-cycle patterns of financial behavior and by integrating institutional trust into the microeconomic analysis of retirement planning.