EFFECTS OF ISLAMIC FINANCIAL LITERACY ON RETIREMENT PLANNING BEHAVIOUR IN UNIVERSITI UTARA MALAYSIA ACADEMIC STAFFS
DOI:
https://doi.org/10.24191/jipsf.v7i2.8560Keywords:
Retirement planning behaviour, Islamic financial literacy, demographic factors, attitudes, Islamic Financial KnowledgeAbstract
Retirement planning has become increasingly important due to the rise in life expectancy and the substantial increase in healthcare costs. According to the Department of Statistics Malaysia (2024), the employment rate among individuals aged 15–64 years increased from 67.9% in January 2024 to 68% in April 2024, while the elderly population (aged 65 years and above) doubled from 6.0% in 2016 to 12.0% in 2024. This study examines the factors affecting the relationship between Islamic financial literacy and retirement planning behavior. The study used a survey in which questionnaires were distributed to 200 respondents among the academic staff of UUM. Descriptive statistics, correlation, regression, and ANOVA were used for data analysis. The study found a significant positive relationship between selected demographic factors (income level and age group) and retirement planning behavior. Moreover, the study found a strong positive relationship between attitudes and retirement planning behavior. Furthermore, the study also found a strong positive relationship between Islamic financial knowledge and retirement planning behavior. This study contributes to the Islamic financial literacy literature by investigating the effect of factors such as Islamic financial knowledge, attitudes, and selected demographic factors such as income level and age group on the retirement planning behavior of academic staff. University administrators and policymakers should prepare and offer effective courses, such as seminars and workshops related to Islamic finance, to achieve a high level of awareness of retirement planning behavior among society and university employees.
References
Agnew, J., Bateman, H., & Thorp, S. (2013). Financial Literacy and Retirement Planning in Australia. Numeracy, 6(2). https://doi.org/10.5038/1936-4660.6.2.7
Ali, A., Rahman, M. S., & Bakar, A. (2013). Financial Literacy and Satisfaction in Malaysia: A Pilot Study. International Journal of Trade, Economics and Finance, 4(5), 31-321.
Boisclair, D., Lusardi, A., & Michaud, P.-C. (2015). Financial literacy and retirement planning in Canada. Journal of Pension Economics and Finance, 16(3), 277–296. https://doi.org/10.1017/s1474747215000311.
Dancey, C., & Reidy, J. (2004). Variables and research design. Statistics without Maths for Psychology: Using SPSS for Windows, 1-33.
DeVaney, S. A. (1995). Retirement preparation of older and younger baby boomers. Journal of Financial Counseling and Planning, 6, 25.
Ekerdt, D. J., Hackney, J., Kosloski, K., & DeViney, S. (2001). Eddies in the Stream The Prevalence of Uncertain Plans for Retirement. The Journals of Gerontology Series B: Psychological Sciences and Social Sciences, 56(3), S162-S170.
Foo, S. L., & Soo, E. (2025, June 13). Malaysia’s HR Ministry evaluating proposal to raise retirement age. Society for Human Resource Management (SHRM). https://www.shrm.org/topics-tools/employment-law-compliance/malaysias-hr-ministry-evaluating-proposal-to-raise-retirement-age
Hair, J. F., Jr, Babin, B., Money, A. H. & Samouel, P. (2003), Essential of business research methods. New York: John Wiley & Sons.
Hershey, D. A., & Mowen, J. C. (2000). Psychological determinants of financial preparedness for retirement. The Gerontologist, 40(6), 687-697.
Hira, T. K., Fanslow, A.M. & Vogelsang, R. (1992). Determinants of satisfaction with preparation for financial emergencies. Financial Counseling and Planning, 3, 43-62. https://doi.org/10.3386/w17078.
Huston, S. J. (2010). Measuring financial literacy. Journal of Consumer Affairs, 44(2), 296-316.
Joo, S. H., & Pauwels, V. W. (2002). Factors affecting workers' retirement confidence: A gender perspective. Journal of Financial Counseling and Planning, 13(2).
Kim, J., Kwon, J., Anderson, E. A. (2005). Factors related to retirement confidence: Retirement preparation and workplace financial education. Association for Financial Counseling and Planning Education, 77-89.
Lahey, K. E., Kim, D., & Newman, M. L. (2006). Full retirement? An examination of factors that influence the decision to return to work. Financial Services Review, 15(1).
Lai, M. M. & Tan, W. K. (2009). An empirical analysis of personal financial planning in an emerging Economy. European Journal of Economics, Finance and Administrative Sciences, 16, 99-111.
Lusardi, A., & Mitchell, O. (2011). Financial Literacy and Planning: Implications for Retirement Wellbeing. National Bureau of Economic Research.
Malhotra, N. K. (2004). Marketing Research: An Applied Orientation (4th ed.). New Delhi: Pearson Prentice Hall.
Marshall, E. P., & Homans, F. R. (2004). A spatial analysis of the economic and ecological efficacy of land retirement. Environmental Modeling & Assessment, 9(2), 65-75.
Mehta, K. (1999). Singaporeans‟ perceptions and preparations for retirement: A cross cultural inquiry. Ageing International, 25(3), 31-46.
Moen, P., Sweet, S. & Swisher, R. (2005). Embedded career clocks: The case of retirement planning. Advance in Life Course Research, 9, 237-265.
Mugenda, D. M., Hira, T. K. & Fanslow, A. M. (1990). Assessing the causal relationship among communication, money management practices, satisfaction with financial status, and satisfaction with quality of life. Lifestyles: Family and Economic Issues, 11, 343-360.
Mustafa, W. M. W., Hassan, M. S., Asyraf, M., Islam, M. A., Rahman, S., & Royhan, P. (2023). The Effects of Financial Attitudes, Financial Literacy and Health Literacy on Sustainable Financial Retirement Planning: The Moderating Role of the Financial Advisor. Sustainability, 15(3), 2677. https://doi.org/10.3390/su15032677
Organization for Economic Co-operation and Development (OECD). (2024). Current retirement ages. In Pensions at a Glance Asia/Pacific 2024. OECD Publishing. https://www.oecd.org/en/publications/pensions-at-a-glance-asia-pacific-2024_d4146d12-en/full-report/current-retirement-ages_4a205fd7.html.
Organization for Economic Co-operation and Development (OECD). (2011). Society at a Glance: OECD Social Indicators.
PISA (2012). Assessment and Analytical Framework: Mathematics, Reading, Science, Problem Solving and Financial Literacy, OECD Publishing. Retrieved February 20, 2014, from http://dx.doi.org/10.1787/9789264190511-en.
Princeton Survey Research Associates (PSRA). (1997). Planning for the future: Are Americans prepared to meet their financial goals? Nations Bank Consumer Federation of America. Princeton, NJ.
Richardson, V., & Kilty, K. M. (1989). Retirement financial planning among black professionals. The Gerontologist, 29(1), 32-37.
Sekaran, U. (2003). Research Methods for Business: A Skill Building Approach. Southern Illinois University at Carbondale: John Wiley & Sons, Inc.
Sekaran, U. B., & Bougie, R. R. (2013). Research Methods for Business: A Skill Building Approach (5th ed.). New Delhi: John Willey & Sons Limited.
Szinovacz, M. E. (1980). Female retirement: Effects on spousal roles and marital adjustment. Journal of Family Issues, 1(3), 423-440.
Wijaya, H. R., Hati, S. R. H., Ekaputra, I. A., & Kassim, S. (2024). The impact of religiosity and financial literacy on financial management behavior and well-being among Indonesian Muslims. Humanities and Social Sciences Communications, 11(1). https://doi.org/10.1057/s41599-024-03309-6.
Yuh, Y., & DeVaney, S. A. (1996). Determinants of couples' defined contribution retirement funds. Journal of Financial Counseling and Planning, 7, 31.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Khalid Abdi, Abdallah al-Shami
This work is licensed under a Creative Commons Attribution 4.0 International License.
