Employee Financial Literacy And Retirement Planning Behavior: A Case Study

Abstract

This study explores the relationship between employee financial literacy and their retirement planning behavior, with a focus on understanding how financial knowledge influences retirement preparedness. As the global workforce faces increasingly complex financial landscapes and the shift from employer-sponsored pensions to self-managed retirement plans, financial literacy has emerged as a key factor in shaping individuals' retirement saving and investment behaviors. Using a case study approach, this research examines a sample of employees across different industries to assess their levels of financial literacy and the extent to which it impacts their retirement planning decisions. The study employs both quantitative surveys and qualitative interviews to capture a comprehensive view of employees' understanding of financial concepts, including budgeting, saving, investing, and managing retirement accounts. The findings reveal that employees with higher financial literacy are more likely to engage in proactive retirement planning, contributing more to retirement accounts, selecting diverse investment portfolios, and taking advantage of employer-sponsored retirement benefits. Conversely, those with lower financial literacy tend to exhibit passive behavior, often resulting in inadequate retirement savings. The study also highlights the importance of workplace financial education programs and policy recommendations to improve employees' financial capabilities. Ultimately, this research underscores the need for tailored interventions to enhance financial literacy as a means to foster better retirement planning outcomes and long-term financial security.