Financial Literacy and Retirement Planning Behaviour of Salaried Employees in Bhopal: A Mediating Role of Risk Attitude
Keywords:
Financial Literacy, Retirement Planning, Risk Attitude, Salaried Employees, Mediation BhopalAbstract
Objective: This study investigates the relationship between financial literacy and retirement planning behaviour among salaried employees in Bhopal, Madhya Pradesh, with a specific focus on the mediating role of risk attitude. In an era of declining traditional pension systems, understanding the behavioral determinants of retirement preparedness is critical.
Methodology: A cross-sectional survey was conducted with 150 salaried employees in Bhopal. Data were collected using a structured questionnaire measuring financial literacy, risk attitude, and retirement planning behaviour. Mediation analysis was performed using PROCESS macro (Model 4) with bootstrapping at a 95% confidence interval.
Findings: The results indicate a significant positive relationship between financial literacy and retirement planning behaviour. Risk attitude was found to partially mediate this relationship, suggesting that financially literate individuals tend to adopt more calculated risk attitudes, which in turn enhances their engagement in retirement planning. The total effect of financial literacy on retirement planning was significant (β = 0.52, p < 0.001), with an indirect effect through risk attitude (β = 0.18, 95% CI [0.09, 0.28]).
Conclusion: The findings underscore the importance of integrating financial literacy programs with risk management education to improve retirement preparedness among salaried employees in Bhopal. Policy implications are discussed for employers, financial institutions, and government agencies.
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