Abstract
Saving for retirement is a central concern for governments all over the world. Increasing longevity and the rising cost of post-retirement medical cover for members who fail to save enough for retirement becomes the responsibility of the governments. Of greatest concern are individuals who deliberately opt not to plan and save for retirement. The aim of this study is to investigate how behavioural factors influence the retirement planning of middle and high income earners in South Africa. A sample of 1 880 pre-retirees earning more than R16 000 per month was selected from four economic sectors (mining, finance, trade and manufacturing) in South Africa. Online questionnaires were administered to gather data on behavioural factors that influence retirement planning behaviour. The data was statistically analysed to determine the significance of the factors that influence the retirement planning behaviour of the respondents. It was found that while some variables (retirement goal clarity and self-rated knowledge of financial planning) had a strong and significant correlation with retirement planning behaviour, future time perspective and potential conflicts to retirement had weak and insignificant relation to retirement planning behaviour. Regression analysis was also applied to test the extent to which the observed behavioural factors influence retirement planning behaviour. All six psychological variables (planning activity level, goal clarity, future time perspective, risk tolerance, self-rated knowledge of financial planning and potential conflicts to retirement) were found to influence retirement planning. The regression model explained 62% of the variability in retirement planning behaviour of middle and high income earners in South Africa.
M.Com. (Financial Management)