A Study on Relationship between Psychological Factors and Retirement Financial Planning
Keywords:
Cognitive condition, emotional stability, future orientation, retirement attitudeAbstract
No doubt, income during working age is the most important factor shaping post retirement wellbeing of an individual. However, studies show that within same income group people tend to develop quite different post retirement well being status. A large number of employees are not able to add any significant amount for their retirement specially when they could have done it while working. There are others who are able to accumulate wealth but their funds get eroded very quickly in the beginning phase of retirement life due to inflation or emotional expenses. Yet there are people who consistently manage to set apart some funds for retirement and even after retirement, they manage to sustain these savings while receiving regular incomes.
While most of the studies in the realm of retirement planning have worked upon demographic variables to analyze these differences, this study is an attempt to explore relationship between psychological variables and retirement planning behavior. Five psychological variables cognitive condition, goal setting, emotional stability, future orientation and retirement attitude were taken into account to predict retirement planning behavior. Analyses demonstrate that psychological factors play imperative role in retirement planning practices followed by individuals. Consequently, this study contributes to realistic and useful implication for retirement financial planning.
References
Feldman, S. K. (2000). Working in Retirement: The Antecedents of Bridge Employment and Its Consequences for Quality of Life in Retirement. The Academy of Management Journal , 6 (43), 195-210.
Furnham, A., & Argyle, M. (1998). The psychology of money. New York: Routledge.
Hershey D. A., Henkens K., Van Dalen H. P. (2010). what drives retirement income worry in Europe? A multilevel analysis. European Journal of Aging, 7, 301–311
Hershey, D. A. (2004). Psychological influences on the retirement investor. CSA Journal: Certified Senior Advisor, 22, 31–39.
Jacobs-Lawson, J. M. (2003). Age differences in planning for retirement among working women. Doctoral dissertation completed at Oklahoma State University, Department of Psychology, Stillwater, OK.
Keizi, L.K. (2006). Barriers to Pension Scheme Participation by Workers in the Informal Economy. Adaptation & Aging 20 (12)
Mitchell, A. L. (2007, October). Financial Literacy and Retirement Planning:New Evidence from the Rand American Life Panel. Working Paper, Michigan Retirement Research Center , 01-27.
Mowen, D. A. (2000). Psychological Determinants of Financial Preparedness for Retirement. The Gerontologist, 40(6), 687-697.
Van Rooij M., Lusardi A. & Alessie, R., (2011). Financial Literacy, Retirement Preparation and Pension Expectations in the Netherlands. Working Papers. Center for Research on Pensions and Welfare Policies, Turin, Italy.
