Employees’ Retirement Saving Behaviour During The Covid-19 Pandemic in Malaysia

Sze Mun Lim,Teck Heang Lee,Teng Tenk,Melissa Teoh

doi:10.6007/ijarbss/v11-i3/8855

Abstract

Retirement planning has recently been prioritized by employees to safeguard a comfortable retired life. The objectives of the study were to assess whether income level, economic condition, saving behaviour and retirement goal clarity affect employees’ retirement saving behaviour during the COVID-19 pandemic in Malaysia. Life-cycle theories of savings and investing and theories of mental accounting are applied to determine the factors affecting employees’ retirement saving behaviour during the COVID-19 pandemic in Malaysia. Mix methods research design is conducted, where the quantitative survey is supplemented by a qualitative interview. The findings provide essential insights to governments in both developing and developed countries on the financial education for children starting young to ensure successful financial retirement planning during downturn and pandemic. This study shows that income level, economic condition, saving behaviour and retirement goal clarity are significant determinants of retirement saving behaviour, hence it has contributed to the conceptual model of retirement saving behaviour which enables individuals to plan their retirement well.

Highlights

Retirement is defined as one’s act of leaving employment, career or occupation permanently (Mansor, Hong, Abu & Shaari, 2015)
The result is consistent with the findings of past empirical studies which concludes that higher household income level is positively related to the accumulation of retirement fund by individuals
According to Kim et al (2004), individuals with high incomes are found to be more likely to participate in the retirement saving program

Summary

Introduction

Retirement is defined as one’s act of leaving employment, career or occupation permanently (Mansor, Hong, Abu & Shaari, 2015). It typically marks the end of one’s employment life and the beginning of the usage of retirement funds accumulated over the working period. The rising living cost and living standard in Malaysia has made the rising age phenomenon a huge issue especially to those people who are with little retirement savings (Chan, 1997). Sufficient retirement savings is important for the retiree to be ready for the heavy medical expenses, especially for Malaysians with life span increasing to 75 years

Objectives

Methods

Results

Conclusion