Financial literacy, personal savings behavior, and spirituality as predictors to retirement planning

There is a growing concern by policymakers and researchers around the world about low levels of retirement planning. In spite of the national debates to address this concern, incidences of low levels of retirement planning are on the rise globally. A study by Okoth, (2016), indicates that at least 90% of Kenyans are not planning for retirement, a worrisome trend. Given that saving for retirement plays a significant role in world economies, the understanding of the factors that influence retirement planning becomes necessary. This dissertation aimed at building a predictive retirement planning model using multiple regression analysis. Financial literacy, personal financial savings behavior, and spirituality were considered as probable predictive factors of retirement planning among the Seventh-day Adventist workers in Kenya. While literature reveals the importance of retirement planning, there are fewer empirical studies showing the influence of financial literacy, personal saving behavior and spirituality as predictors to successful retirement planning. To address this gap in knowledge, this research was designed to build a retirement planning predictive model using regression analysis. Further tests, t-test, ANOVA, and correlation were employed. As part of the study, a survey instrument was administered to 332 respondents from Adventist University of Africa, University of Eastern Africa, Baraton and the East and West Union Conferences in Kenya. The results indicate a significant model: (F [3,328] = 325. 554, p < .001). The model explains for 75% of the variance in retirement planning (Adjusted R2 of .749). Financial literacy and personal savings behavior are the significant predictors of retirement planning whereas spirituality is not (p = .091). Further tests show statistically significant differences in financial literacy, personal savings behavior, spirituality, and retirement planning based on the demographic characteristics of the respondents. The results indicate that the older and middle-aged workers are associated with higher levels of financial literacy and savings behavior when compared with the young respondents (p < .05). Retirement planning also differs on professional background, where pastors show higher levels of planning when compared to the faculty, the non-teaching staff, and the administrators. The findings conclude that retirement planning remain low among the church workers. Moreover, the role of financial literacy and personal savings behavior is key in promoting successful retirement planning. The church should then initiate policies and education training programs that advocate for defined contributions and other incentives geared towards empowering its employees to plan for retirement. This study will benefit the Seventh-day Adventist Church policy makers and industry players in designing appropriate training programs for the workers and act as a wakeup call for individuals who are not saving for retirement.