The Role of Financial Literacy in Retirement Planning and Wealth Accumulation Among Self-employed Thai Workers

Abstract

This paper explores the effect of financial literacy on retirement planning and wealth accumulation among self-employed Thai workers. Self-employment is expected to show a significantly increasing trend soon, raising concerns about saving for retirement due to a lack of social security and pension provision. Therefore, planning and saving for retirement becomes the responsibility of the self-employed themselves to maintain their well-being in retirement. Financial literacy has been found to improve such financial decisions and wealth accumulation. This paper adopts the financial literacy criteria of the Organisation for Economic Co-operation and Development with a dataset provided by the National Statistical Office. This study employed Ordinary Least Squares and Probit regression. Financial literacy analysis results show that the three components of financial literacy are influential factors in enhancing the probability of planning for retirement among self-employed workers. Moreover, although financial knowledge and financial behavior are also reported to have a positive impact on increasing net worth across all levels of employment status, financial attitude is insignificant. Finally, this study suggests that policymakers should formulate various financial education programs and financial seminars to comply with the needs of people with different characteristics and living conditions.