Abstract
Orientation: Individuals are encouraged to start saving for retirement as early as possible to ensure that sufficient retirement funding is accumulated. However, few individuals are financially independent at retirement. Research purpose: To examine the influence of provisions, attitudes and intentions on the retirement funding adequacy of black individuals, as the majority of the South Africans are black individuals. Motivation for the study: Despite the increased access to financial services and products, many black individuals reach retirement age destitute. This research investigated how provisions for retirement, attitudes towards retirement and retirement intentions influence the retirement funding adequacy of black South Africans. Research approach/design and method: A quantitative approach was applied, whereby questionnaires were distributed to a sample of 441 black individuals in the Eastern Cape Province of South Africa through stratified sampling and convenience sampling. Main findings: The results of the research revealed that retirement provisions and retirement attitudes exert the most influence on the retirement funding adequacy of black South Africans. This suggests that black South Africans should focus on amassing retirement savings and fostering a positive attitude towards retirement to ensure that they reach retirement age with adequate financial resources for retirement. Practical/managerial implications: Financial institutions and financial planners should be aware that individuals’ provisions for retirement and attitudes towards retirement are significant contributors in ensuring that retirement funding adequacy is ascertained. Contribution/value-add: This study made a contribution in understanding the aspects that influence the retirement funding adequacy in the South African context, particularly amongst black South Africans.
Highlights
Research studies on retirement perceive it to be an important life event that includes two main features
A multiple regression analysis was used to test whether Retirement provisions, Retirement attitudes and Retirement intentions have an influence on Retirement funding adequacy, as the purpose of a multiple regression analysis is to investigate, simultaneously, the effects of a number of independent variables on a single dependent variable (Gravetter & Forzano 2012:415; Zikmund et al 2010:592)
The results reveal that Retirement provisions (t = 10.045) exerts a greater influence on Retirement funding adequacy than Retirement attitudes (t = 8.077)
Summary
Research studies on retirement perceive it to be an important life event that includes two main features. The Department of Social Development (2018) states that 3.5 million South Africans access the State Old Age Pension (SOAP) grant, and these individuals would otherwise have little or no income support for either themselves or their dependents. Individuals are encouraged by the South African government to participate in other retirement savings vehicles to eliminate the possibility of having the SOAP grant as the only form of retirement provisions (Department of Social Development 2018)
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