Generation Y’s Intention to Invest in Retirement Planning

Abstract

Investing in retirement planning is vital to prepare for life after the retirement period when there is no active income. This is because relying solely on saving or pension fund is not enough to sustain future retirement period due to an increment of life expectancy, inflation, and living costs. This paper aims to help Generation Y and parties involved understand the behavioral trait and psychological biases taking a role in influencing their intention to invest for retirement in Malaysia. The study also helps Generation Y to recognize the importance of early retirement preparation. The paper is written according to the knowledge of financial planning, retirement planning, and investment planning. 500 survey questionnaires were distributed both physically and online, and only 240 responses collected. After data pre-screening, 232 responses were valid to use for further analysis. Findings revealed that subjective norms, attitude, pension knowledge, and trust towards online financial service have a positive impact on the intention of Generation Y to actively invest for retirement. Subjective norm was the most important factor, whereas trust was the least important factor. Overall, an individual's behavioral traits play a huge role in positively influencing Generation Y's intention to invest in Malaysia's retirement fund. Generalizations of these findings are expectedly limited Gen Y in Klang Valley; it does limit the generalizability of the results for all people in Malaysia. Despite limitations, the results can provide some theoretically and practically implications whereby financial companies and the policymaker should focus on promoting the investment in retirement planning for all people in Malaysia but not limited to Gen Y.