Factors Influencing Planning for Retirement

Abstract

1Introduction As in many the other counties, funding for retirement in Australia is a difficult public policy issue. Australians are living longer and the birth rate has been dropping consistently over recent decades. Consequently, the population here is ageing. Over-65 year olds are expected to comprise some 18% of the Australian population by 2020 and 26% by 2050, in contrast to about 12% of the population at the turn of the century (ABS, 1998). People in the post-War population bulge, the baby-boomers, are reaching the age of retirement now and in the near future. This rapid increase in the number and proportion of retirees will serve to highlight the retirement-incomes problem.The ageing of the population may reduce economic growth but, if those extra years of life were devoted more to work rather than to retirement, economic growth may be enhanced. The age of retirement is obviously the key determinant of the division of each life between participation and dependency. However, little is known in Australia about the decision to retire. This paper reports four different aspects of decisions to retire in order to give readers an understanding of the factors influencing retirement decisions of Australians. Firstly, it describes the planned retirement age decision of the sample in terms of an ogive; secondly, it identifies the factors influencing the decisions to retire by retirees and contrasts them with factors important to non-retirees. Thirdly, it reports a model of the probability of working full time because those who find fulltime employment are in a better position not only to plan for their retirement but also to have a secure income at retirement; and finally, it analyses the planned retirement age of non-retired Australians and investigates further the determinants of planned retirement ages.The key factors affecting the decision to retire can be classified as:The external factors include the ability to find suitable employment, working environment and job satisfaction. The personal factors include marriage, pregnancy and own-and family-health. The financial factors cover accumulating a sufficient level of assets to fund retirement or qualifying for an appropriate pension scheme. The lifestyle factors include the need to join a spouse's/partner's retirement and the desire to spend the rest of life in recreational and leisure activities.The paper is structured as follows. The next section provides a brief background to the study. Section three describes the analytical approach including the data collection. The penultimate section provides the results of the study with a discussion of key findings. The final section summarises the results with a description of major implications for government policy makers and financial planners.

The determinants of recovery from the Black Saturday bushfire: demographic factors, behavioural characteristics and financial literacy

“…On the other hand, Bernheim and Garrett () state that an improvement in financial literacy has a positive effect on retirement savings. The key papers documenting the factors affecting retirement planning are Delpachitra and Beal (), Ng et al . () and Chowk et al .…”

“…On the other hand, Bernheim and Garrett (2003) state that an improvement in financial literacy has a positive effect on retirement savings. The key papers documenting the factors affecting retirement planning are Delpachitra andBeal (2002), Ng et al (2011) and Chowk et al (2016). The factors highlighted in these studies relate to risk (inflation, debt management, market risk and liquidity risk), personal finance (tax, savings pattern, estate planning), investments (diversification, asset allocation, detailed financial goals, the number of meetings with clients) and retirement (longevity and health risk, insurance cover, clients approaching bankruptcy, and clients who stay at home instead of age care centres).…”

Using Proactivity, Time Discounting, and the Theory of Planned Behavior to Identify Predictors of Retirement Planning

“…However, despite the clear benefits of retirement planning, it appears that many people lack the motivation to engage in either formal or informal preparation activities designed to promote their financial and nonfinancial wellbeing in retirement (Ekerdt, Hackney, Koslosky, & DeViney, 2001). For example, Delpachitra and Beal (2002) reported that over 30% of Australian preretirees have neglected retirement planning altogether, and Lee and Law (2004) found the majority of respondents in a Hong Kong study were significantly underprepared for retirement.…”

Retirement Planning: Young Professionals in Private Sector

“…Research findings by Delpachitra & Beal (2002) also reveals that there is strong correlation between probabilities of having a suitable job with the retirement planning by age of an individual. Saving behavior also has been accepted as one of factors that influencing retirement planning.…”