Financial Literacy in an African society: An essential tool for retirement planning

Abstract

The paper explores the influence of financial literacy on retirement preparation among retirement planners. Purposive sampling was undertaken in selecting 131 respondents for the study. Data was subjected to univariate, correlation and thematic analysis. The results show a discrepancy regarding eligibility to contribute to and benefit from pension scheme and/or system. This has implications for savings in the long-term, establishing that such inadequate information dissemination and systemic challenges pertains. This is detrimental to the systematic process of resource mobilisation and allocation towards retirement, which encompasses pension contribution, savings, house acquisition, healthcare, relationship building. Public education programmes correlate with improved saving behaviour and financial decision-making. Pension system information and preparation towards life in old age are inseparable. These act to avoid old age poverty in an era of increased life expectancy. This is particularly important because financial literacy is a predictor of financial behaviour, whereas retirement preparation is a powerful predictor of wealth accumulation for life in old age.