Female workers' readiness for retirement planning: an evidence from Indonesia

Abstract

PurposeThe purpose of this study is to examine the effects of demographical factors (age, education and income); psychological factors which are future time perspective (FTP) and financial risk tolerance (FRT); along with financial literacy on retirement planning among female workers in Indonesia.Design/methodology/approachThis study applies a quantitative approach, where primary data was acquired through online surveys to 529 workers in various locations in Indonesia. After data cleaning, the final sample size was 304. The PLS-SEM technique was utilised to assess the structural model in the study.FindingsThe results of this study show that income affects an individual's perspective towards the future. Financial literacy is confirmed to have a direct effect on retirement planning activity. Furthermore, financial literacy appears to be a significant mediator between demographical factors and FTP in affecting retirement planning. An individual's acceptance towards risk is also affected by financial literacy.Practical implicationsThe general public, especially female workers group who have no retirement funds, need to be educated on financial literacy. The government might need to encourage other parties and work together to financially educate the public, specifically regarding investments for retirement planning.Originality/valueMost previous studies on retirement planning focused on demographical factors in general, and not specifically on a certain group. Filling the gap of existing studies, this study specifically discusses retirement planning done by female workers in Indonesia. Women's role as a workforce, with their psychological conditions and financial literacy, makes for an interesting topic to be studied further in terms of retirement planning.

The Aging and Retirement: A Comparative Study on the Pension Policy in South Korea and Indonesia

“…Regarding the micro-level perspective, individuals in their youngage groups should increase their awareness and willingness to participate in pension planning through integrative support within the community, government institutions, and private sectors. Thus, this would increase the financial independence of the elderly groups (Larisa, Njo, & Wijaya, 2020;Gunadi, et.al, 2021.…”

“…The retirement age disparity between private sectors and civil servant workers in Indonesia. Astri & Naomi (2018) The perception and preparation to retirement in Indonesia Larisa, Njo, & Wijaya (2020) The significant influence of female workers' readiness and retirement planning Nizeyumukiza, et.al, (2020).…”

“…In the context of Indonesia regarding the retirement plan, it showed a pretty similar situation with Korea. The (active) workers with higher income can prepare the desired retirement plan, and those with less income have less opportunity to access the multiple pension plan (Larisa, Njo, & Wijaya, 2020;Nizeyumukiza, et.al, 2020). Furthermore, Nizeyumukiza, et.al, (2020) found that the active workers with lower income may have a possibility to work longer after their retirement age.…”

“…Furthermore, Nizeyumukiza, et.al, (2020) found that the active workers with lower income may have a possibility to work longer after their retirement age. But, on the other hand, Larisa, Njo, & Wijaya (2020) found that there is a potential concern to increase the workers in planning the better retirement regardless of their income amount by increasing the financial literacy to workers. Financial literacy is expected to enhance the knowledge of financial issues.…”

A Preliminary Analysis of Retirement Planning Behaviour: Evidence From East-Coast Malaysia

“…Pyles et al (2016) demonstrate that financial risk tolerance is vital in determining whether an investor likes to incur risks or otherwise, as well as picking the best investment strategy to join and how much money to put into it. Further, the level of financial literacy also influences individuals' willingness to accept risk (Larisa et al, 2020).…”