Abstract
<p class="MsoNormal" style="text-align: justify;">Problems have been identified pertaining to retirement scheme of the private sector employees in Malaysia where there is no legislated pension system in force. As a result of that, pension scheme and savings are more of a voluntary basis; although the principle is good but in practice many retirees suffer financially during their retirement. The objectives of this study are to examine factors contributing to individual’s retirement planning behavior and the private pension system in the private sector in Malaysia. Retirement planning behaviour in this study was measured with series of questions on behaviour about retirement planning. A total of 500 working individuals from private sectors in the age group of 40 years and above had participated in this study. The results identified several significant variables in the prediction of retirement planning among working individuals in Malaysia, including individual who had higher levels of education, higher levels of income, financial literacy, retirement goal clarity and attitude towards retirement. There is a correlation between retirement planning behavior and saving for old aged. As a response to the result collected from the survey, a legal proposition is put forward to address issues of pension during retirement among private sector’s employees.</p>
Highlights
Retirement means that a person permanently ends or ceases his or her paid employment
The findings showed that three factors such as age, education level, income level, goal clarity, attitude toward retirement and potential conflict in retirement are the factors influencing the retirement planning behaviour
This study concluded that factors affecting retirement planning behaviour in the working population has a major influence in the employees’ savings retirement
Summary
Retirement means that a person permanently ends or ceases his or her paid employment. Apart from that, by reason of the human lifespan is increasing, the question that may arise is whether the money collected for the purposes of retirement or pension sufficient to cover the desired level of quality of life, coupled with rising medical costs and the cost of living. Most countries have their own retirement systems and the system distinguishes between public and private sector employees (Hassan et al, 2015). A concerning issue arises whether employees in the private sector who receives that lump sum saving from EPF are able to accommodate their lives after retirement. The necessary financial resources that can be used by the group after their retirement need to be catered for either through saving or returning to work
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