Analysing the determinants of retirement planning behaviour of workers in the Ministry of Home Affairs and Immigration
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Date
2021
Authors
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Journal ISSN
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Publisher
University of Namibia
Abstract
There is a consensus that while retirement is a worthwhile phase in one’s life, a successful and happy retirement requires planning with continual evaluation. Retirement planning is a systematic way of setting aside resources in order to provide sufficient funds in the old age and thus, decisions prior to retirement are very crucial in eliminating financial difficulties thereby securing future health, wealth and wellbeing. Evidence suggests that governments in many developing countries are faced with the challenge of providing sufficient retirement benefits for their aging population and the majority still live on the borderlines of poverty with pension funds unable to provide a comfortable life. For better policy options for these countries, there is need to examine the factors that influence people’s retirement planning behaviour. These studies contribute to the literature by investigating the determinants of retirement planning behaviour of employees in the Ministry of Home Affairs and Immigration in Namibia. The researcher collected primary data from employees of the Ministry of Home Affairs and Immigration and used the logit regression to examine factors that significantly influence their retirement planning behaviour.
The empirical analysis considers the alternative measures of retirement planning
decisions, by classifying retirement planning decisions into the ownership of
investments for retirement, savings and expected amount to be saved towards retirement. The results reveal that irrespective of the various ways of measuring retirement planning behaviour, individuals with favourable socio-economic status are more likely to save or invest for retirement relative to their counterparts with unfavourable socio-economicstatus. For instance, financial literacy, economic knowledge, educational attainment, social interaction and seeking financial advice are positively and significantly associated with investment and saving decisions of employees, whereas being female inversely affects their investment and saving decisions. Disaggregating the analysis by age groups, the researcher finds that the effects of these factors are consistent across the different age groups. Thus, any policy option that can enhance the economic and financial knowledge of employees and their educational attainment will improve their retirement planning behaviour directly and indirectly through financial advice to others and social
interaction. The determinants of retirement planning decisions suggest that individual characteristics are likely to influence the probability of investing and saving for retirement. The researcher recommend that, the government and various policy makers have a role to play in fostering financial education to individuals. Similarly, education programs that target the affected group, there is a need to come up with devising ways of improving the socio-economic status of individuals, their financial and economic knowledge is a potential way of improving the retirement planning behaviour of employees. This suggests that the devised policies should take into consideration the differences in age of the employees, as different policy options may influence retirement planning behaviour differently across age groups.
Description
A thesis submitted in partial fulfilment of the requirements for the Degree of Master of Business Administration (Finance)
Keywords
Retirement, Ministry of Home Affairs and Immigration in Namibia, Investments