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A Framework for Retirement Planning Based on Financial Literacy and Wealth Accumulation

Author

Listed:
  • Stanley Yap Peng Lok

    (SEGi University)

  • Chong Wei Ying

    (SEGi University)

  • Leow Hon Wei

    (SEGi University)

Abstract

Purpose ? Saving alone is not adequate to achieve financial independence to an effective retirement planning because financial literacy we have is not properly transferred and applied to financial planning. This paper aims to study the moderating role of wealth accumulation with the financial literacy that affects retirement planning.Design/methodology/approach ? This study uses multiple regression and hierarchy regression to analyse 250 data to reflect the retirement planning related to financial planning. A closed-ended questionnaire is adopted and the unit of analysis is an individual.Findings ? The study finds the following: the constructs of availability, awareness, affordability, and accessibility help in improving retirement planning; financial literacy improve the effectiveness of financial planning. In addition, wealth accumulation serves as a moderator for retirement planning to enhance the effectiveness of financial planning.Practical implications ? Individuals are urged to devise an effective retirement planning mechanism by careful thought on the needs of an individual. Furthermore, an effective planning helps to develop an environment that will encourage the high integrity of financial literacy for individual to apply their skills and knowledge. Originality/value ? This study highlights an essential issue. It analyses the interactions between the dimensions of wealth accumulation with the financial literacy and retirement planning in improving the financial planning effectiveness in Malaysia.

Suggested Citation

  • Stanley Yap Peng Lok & Chong Wei Ying & Leow Hon Wei, 2017. "A Framework for Retirement Planning Based on Financial Literacy and Wealth Accumulation," Proceedings of Business and Management Conferences 5607977, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:ibmpro:5607977
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    References listed on IDEAS

    as
    1. Lusardi, Annamaria & Mitchell, Olivia S., 2007. "Baby Boomer retirement security: The roles of planning, financial literacy, and housing wealth," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 205-224, January.
    2. Christopher B. Bumcrot & Judy Lin & Annamaria Lusardi, 2011. "The Geography of Financial Literacy," Working Papers 893, RAND Corporation.
    3. Lusardi, Annamaria & Mitchell, Olivia S., 2011. "Financial literacy around the world: an overview," Journal of Pension Economics and Finance, Cambridge University Press, vol. 10(4), pages 497-508, October.
    4. Christopher B. Bumcrot & Judy Lin & Annamaria Lusardi, 2011. "The Geography of Financial Literacy," Working Papers WR-893-SSA, RAND Corporation.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    financial literacy; retirement planning; financial independence; financial planning; wealth accumulation;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D19 - Microeconomics - - Household Behavior - - - Other
    • D00 - Microeconomics - - General - - - General

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