Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

The Influence of Financial Literacy on Retirement Planning in South Africa

By Nyasha Tapiwa Dhlembeu, Mamekwa Katlego Kekana & Mpinda Freddy Mvita

Background: A shift in the retirement planning and pensions landscape has created an enormous responsibility for individuals to plan for their retirement provision actively. Very few South Africans reach the average retirement age of 65 years with sufficient funds to sustain themselves during their retirement.

Purpose/objective: Using secondary data from the 2011 South African Social Attitudes Survey (SASAS), this study aims to examine the influence financial literacy has on the retirement planning of South Africans. The secondary aim of the study was to investigate the financial literacy and retirement planning behaviour of certain demographic groups: gender, age, race, education, and income levels.

Design/methodology: Binomial logistic regression is used to establish if financial literacy influences planning for retirement.

Findings: The results show that financial literacy significantly influences retirement planning. Furthermore, only 24% of South Africans actively plan for retirement and financial literacy was particularly low among women, less educated individuals and Black African people.

Research limitations: Firstly, the study relies on self-reported measures. Secondly, the binomial logistic regression analysis only indicates the likelihood of an individual planning for retirement based on their financial literacy score.

Originality/value: This study contributes to retirement planning literature as it is one of the few studies that explore retirement planning and financial literacy in the context of a developing country using a geographic, nationally representative sample.

 

Source @SSRN