Financial literacy and personal retirement planning: a socioeconomic approach

Kulondwa Safari, Charity Njoka and Mugisho Guershom Munkwa

Journal of Business and Socio-economic Development, 2021, vol. 1, issue 2, 121-134

Abstract: Purpose - The purpose of this study was to investigate the effect of financial literacy on personal retirement planning in Bukavu city in the Democratic Republic of the Congo (DRC), which is a Sub-Saharan underdeveloped country with a weak pension and social security system. Design/methodology/approach - This study used a structural equation modeling and a sample of 361 public sector employees selected in Bukavu city in the DRC. The data were collected through a survey questionnaire, and the data were analyzed using SPSS and SMART PLS software. Findings - The results from the study revealed that financial literacy has a significant impact on personal retirement planning. Two constructs of financial literacy, respectively, computation capability and financial knowledge were found to have a significant impact on personal retirement planning, while financial education and attitudes toward financial products were found not significant in explaining personal retirement planning. Practical implications - The findings from this study can be used by policy makers in the DRC to design socioeconomic programs, aiming to increase the level of financial literacy in the country and awareness on personal retirement planning. Originality/value - The reviewed studies were based mostly on developed countries, and countries were the social security system works effectively. We have not found a study on financial literacy and retirement planning that has been conducted in the DRC, which is a country with specific characteristics compared to developed countries.

Keywords: Financial literacy; Personal retirement planning; Structural equation modeling; Democratic republic of the Congo (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jbsedp:jbsed-04-2021-0052

DOI: 10.1108/JBSED-04-2021-0052

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