The Influence of Socioeconomics, Financial Literacy, and Psychological Factors on Teachers’ Retirement Financial Preparation

Abstract

The objective of this study is to examine the relationships of socioeconomics, financial literacy, and psychological factors with teachers' retirement financial preparation. Retirement is a situation that all working individuals will face. Retirement has enormous implications not only for oneself but also families and the surrounding community. Teachers are not excluded from this phenomenon; thus, they need to have a high awareness of retirement financial preparations. The study used a survey approach through self-administered questionnaires for collecting data and the sample of the study consists of 410 secondary school teachers in Selangor, Malaysia, who were selected using random sampling. Data were analyzed using multiple regression analysis via IBM SPSS, Version 26. The findings showed the value of R squared is 0.332 which means socioeconomics, financial literacy, and psychological factors are simultaneously influential on teachers’ retirement financial preparation. In addition, the findings also showed that financial literacy contributes significantly to the teachers' retirement financial preparation. Since financial literacy denotes a significant contribution to retirement financial preparation, various efforts should be made to raise awareness of retirement financial preparation among teachers. This study can help teachers realize and open their eyes and indirectly teachers will start planning their retirement financial preparations. However, in this study, the researcher only focused on school teachers only. Therefore, future researchers need to choose a wider range of respondents, considering that financial literacy knowledge in financial planning for retirement is very important for all groups.