The Influence of Financial Literacy on Retirement Planning in South Africa

The impact of financial literacy on financial preparedness for retirement among formally employed individuals in Zimbabwe

“…Oseifuah (2010) focused on financial literacy and youth entrepreneurship to test knowledge of interest rates. There were questions about money management, income, savings and investments, debt, and spending from Fatoki (2014), cited in Dhlembeu (2018).…”

“…Individuals are said to be adequately equipped for retirement if they have accrued the least wealth required to meet their retirement needs (Mourine et al, 2017). However, it is difficult to measure the consumption levels of individuals during retirement because they differ from individual needs; some individuals have decreased costs during retirement, while others have increased expenses (Dhlembeu, 2018). Retirement preparedness is subjective and can be measured in several ways.…”

“…Previous studies have revealed that a lack of awareness of financial instruments and products affects an individual's ability to make retirement investment decisions. Dhlembeu (2018), in their study in South Africa, proved that financially and economically inexperienced families normally have a tendency to evade stock markets and are less inclined to buy mutual funds at lower fees (Mndzebele & Kwenda, 2020). Clark, Lusardi, and Mitchell (2017) discovered that Federal Reserve Bank workers who were financially literate were most likely to make contributions towards an additional retirement-defined contribution plan.…”

“…Studies have shown that a vast number of pensioners often live despondent lives because of decreased earnings at retirement, which is a result of insufficient forward financial planning for retirement (Dhlembeu, 2018). Studies have found that most employees are not confident in their financial preparedness for retirement plans and are unsure whether they are adequate to cover expenses during retirement.…”