Financial Literacy And Retirement Planning

Based on personal retirement needs, retirement planning means to arrange personal income and asset in order to ensure the realization of the goal of retirement financial arrangement. Retirement planning runs through career and the rest of life after retirement, which can be described as the most important financial decisions for individuals. Recent years, countries around the world are developing and improving their pension system, one of the main changes is to increase the individual’s right to choose, which means that people will take more responsibility for their own pension, so the retirement planning is especially important for individuals. Through analyzing and summarizing the previous studies, this article firstly develops a theoretical model for the study. Secondly, using the 2014 survey data of the Institute of Theoretical and Education of Financial Literacy in Southeast University, adopting LOS, Probit models, an empirical analysis is done to study the factors affecting individual’s retirement planning concept form the perspective of international comparison. Then further researches are done to study the factors affecting individual’s retirement planning behavior and the relationship between financial literacy, retirement planning and financial assets. The results show that financial literacy has a significant impact on individuals’ retirement planning, people who has a high level of financial literacy will plan more for retirement, then there will be more financial assets. Currently, from a global perspective, the individuals have relatively low financial literacy, resulting in financial decision-making errors, which will not only bring a personal loss, but also be harmful to society. However, some traditional factors, such as age, gender, education, wealth and so on, can not be changed within a short time, or even impossible to change, that means those factors have little reference for national policy. While, financial literacy can be improved by education, and therefore, it has a stronger timeliness, and it also has an important significance for both society and individuals.