Integrating Theory of Planned Behaviour to Explore Young Private Sector Employees’ Retirement Planning Behaviour

Abstract

The concern surrounding retirement planning has become a prominent source of concern among the younger labour force in Malaysia. A substantial percentage of individuals between the ages of 18 and 40, who are employed in the private sector, rely on the Employee Provident Fund (EPF) as a means of saving for their retirement. The government's COVID-19 policy allowed for the withdrawal of money, leading to a reduction in savings levels for this particular group. The increasing incidence of bankruptcy cases and insufficient reserves is a worrisome factor for the future survival prospects of upcoming generations. Although several retirement initiatives have been introduced by governmental agencies and financial institutions, a significant number of young Malaysians still lack the necessary dedication to start saving for retirement at an early stage. According to the existing data, people are more likely to spend money than to save it. This study seeks to examine the factors that influence the retirement planning behaviour of young adults in Malaysia. The study suggests that spending attitude and financial literacy are dependent variables, whereas saving intention acts as a mediating variable, and retirement planning behaviour is also a dependent variable. The objective of this study is to enhance the current body of knowledge by developing a theoretical framework that explains the role of saving intention as a mediator between financial literacy and saving attitude in the context of retirement planning behaviour. According to the theory of planned behaviour, the desire to engage in saving behaviour is influenced by both financial literacy and attitudes towards saving. The characteristic that has the strongest link with retirement planning activities is the individual's level of saving intention. The suggested recommendations for further investigation are delineated.