EFFECTS OF ISLAMIC FINANCIAL LITERACY ON RETIREMENT PLANNING BEHAVIOUR IN UNIVERSITI UTARA MALAYSIA ACADEMIC STAFFS

Abstract

ABSTRACT

Retirement planning is an important concern because life expectancy has grown, and the cost of health care has increased. According to a report from the Department of Statistics Malaysia (2016), the number of employed people aged 15–64 years improved from 69.0 in 2015 to 69.2 percent in 2016. 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. Nevertheless, 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.

Key Words: Retirement planning behaviour, Islamic financial literacy, demographic factors, attitudes, Islamic financial knowledge.