DOES FINANCIAL LITERACY IMPACT RETIREMENT READINESS AND LIVING STANDARDS OF FARMERS? AN EMPIRICAL STUDY BASED ON SELECTED FARMERS IN SRI LANKA

Abstract

We studied how financial literacy impacts retirement readiness and living standards among farmers in Sri Lanka with a sample of 200 farmers by administering through a structured questionnaire. We selected the farmers on a convenience basis for the study from the Northwestern Province in Sri Lanka. We conducted a preliminary survey among farmers to understand their financial behaviors. By considering financial literacy as the independent variable, and retirement readiness and living standards as the dependent variables, we developed two ordinary least square regression models to test the hypotheses of the study. The findings of the preliminary survey revealed that most farmers maintain savings accounts, but they visit banks occasionally. Moreover, more than 50% of them are not aware of the benefits of retirement plans. However, the results confirmed that financial literacy has a strong positive impact on retirement readiness and living standards among farmers. Thereby, we concluded that improvements in farmers’ financial literacy could uplift their living standards and retirement readiness. As an implication, authorities shall conduct more awareness programs for farmers on financial knowledge, behavior, and attitudes as assistance to enhance their retirement status and living standards.