Retirement satisfaction as a quantified outcome of superior financial literacy: An empirical investigation

Abstract

The purpose of the study is to create a viable and customised retirement planning system with financial literacy as the driver to achieve retirement adequacy and retirement satisfaction, taking into account the increasing financial needs of retirees. Perception regarding retirement choices necessitates sufficient self-efficacy to implement retirement portfolio decisions. Despite transformation in the way retirement is looked at, planning for retirement has taken a backward stride as individuals concentrate on their present needs rather than a holistic approach to life. The study implemented an online self-administered questionnaire for 770 participants using convenience sampling from India’s two major IT hubs, Bangalore and Chennai. The data samples were analysed using Partial Least Squares Structural Equation Model (PLS-SEM). The study evidenced a strong association between superior financial literacy and retirement planning and identified five essential financial behaviours, such as savings attitude, borrowing pattern, investment decision, insurance allocation, and spending behaviour, that strongly influence individual retirement planning. These behaviours lay the foundation for retirement readiness, lowered debt anxiety, and greater risk-bearing capacity. The results further reveal that individual’s satisfaction levels are significantly influenced by retirement adequacy. Therefore, it is imperative to formulate a well-structured retirement plan to attain retirement adequacy and satisfaction.