DETERMINING RETIREMENT INTENTIONS: A STUDY OF WORKING INDIVIDUALS IN THE EASTERN CAPE, SOUTH AFRICA

Abstract

Many South Africans reach retirement age without adequate retirement provisions. Prior research has indicated that only 6% of the South African population can afford to retire. The rest of the population are forced to continue working past the normal retirement age. Alternatively, South Africans have to depend on their family, friends and the South African government for income during retirement. This is possibly caused by the fact that planning for retirement is a priority only later in one’s life. Therefore, the purpose of this paper is to investigate the factors that influence the retirement intentions of working individuals. A hypothesised model for aiding this investigation was constructed and included variables identified through a thorough review of the literature. The variables illustrated in the hypothesised model were grouped as follows: •?independent variables (financial planner’s role, retirement knowledge; personal and ?financial circumstances) and •?dependent variable (retirement intentions). An exploratory factor analysis was undertaken and Cronbach’s Alpha coefficients were calculated to assess the validity and the reliability of the measuring instrument. A regression analysis was undertaken to test the hypothesised relationships. Based on the results of the exploratory factor analysis, all the independent variables retained their original definitions, however, the dependent variable (retirement intentions) was re-operationalised to retirement planning intentions. The findings of this study revealed that the role of a financial planner is instrumental in determining the retirement planning intentions of individuals and their retirement knowledge has a significantly positive influence on their intention to plan for their retirement. It is recommended that individuals seek the advice of a professional financial planner regarding their retirement planning to ensure that individuals meet their personal retirement goals and objectives. Through the guidance of a financial planner, individuals may also gain more confidence and knowledge about their financial situation at retirement, which may also assist in determining when they intend to retire and to ensure they are not financially destitute at retirement.