BỘ GIÁO DỰC VÀ ĐÀO TẠO ĐẠI HỌC KINH TÉ THÀNH PHỐ HÒ CHÍ MINH BÁO CÁO TỐNG KÉT ĐÈ TÀI NGHIÊN cứu KHOA HỌC THAM GIA XÉT GIẢI THƯỞNG “NHÀ NGHIÊN cưu TRẺ UEH” NÀM 2024 THE IMPACT OF FINANCIAL FACTORS ON RETIREMENT PLANNING AMONG STUDENTS UNIVERSITY IN HO CHI MINH CITY Thuộc nhóm chuyên ngành: Tài chính - Ngân hàng; Thương mại - Quán trị kinh doanh TP. HỒ Chí Minh, tháng 02/2024 ABSTRACT Research problems: In the industrialized world, retirement has extended in duration, and as a result, the number of pensioners has increased as well, raising concerns about the viability of social safety net programs like social security. The sequence of actions involved in building wealth to meet needs in the post-retirement period of life makes up retirement financial planning. The unfavorable short-, medium , and long-term effects of poor financial planning for retirement harm not just the individuals but also their homes, extended families, and ultimately the entire society.
This research aims to investigate the factors that influence the choice to join individual pension plans as well as the quantity of money contributed to those plans. Additionally, this study assesses the probable influence that income plays, which hasn't been thoroughly examined in the financial literature before. Furthermore, this study also confirms the importance of Financial Literacy and Attitudes as well as specific Financial Goals for Investment Intentions in Retirement Planning Behavior of students in HCM City. Research objectives: The article is carried out with the following three goals.
Build a research model, test a scale of factors affecting students' personal financial preparation for retirement and propose directions. Test and measure factors in the model that impact students' personal financial preparation and intention to invest in funds for retirement. Suggest some recommendations to the administrator. Research methods: This article applies a quantitative research approach.
Data collection, using convenience sampling, was conducted online through the Google form. Using SmartPLS software version 4, the authors analyzed the data collected using partial least squares structural equation modeling (PLS-SEM) techniques. Research results: Research results show that the variables Financial Attitudes, Financial Literacy, Financial Goals and Intention to invest all have an influence on Retirement Planning Behavior. Nevertheless, no mediation relationship of investing intention was seen in the results.
Theoretical and practical applications: The study provides students in Ho Chi Minh City with the importance of financial literacy, attitudes and goals. Thereby, helping students have financial plans for a comfortable retirement in the future Keywords: Retirement Planning, Personal Finance, Investment Experience TABLE OF CONTENTS LIST OF TABLES. 1 LIST OF FIGURES.2 LIST OF ABBREVIATION. The necessity of research.2 Regarding the geographical range:.7 CHAPTER 2: LITERATURE REVIEW.
Retirement Planning Behavior. Theory of planned behavior (TPB). Life cycle theory. Retirement Financial Behaviour.
Overview and summary of prior research. Summary of 5 related articles. Factors affecting the intention to achieve financial independence - Early retirement of Millennials in Vietnam (2022):. Financial literacy and personal retirement planning: a socioeconomic approach (2021).
The Effects of Financial Attitudes, Financial Literacy and Health Literacy on Sustainable Financial Retirement Planning: The Moderating Role of the Financial Advisor (2023):. University students and retirement planning: never too early (2019). Framing the Retirement Planning Behavior Model towards Sustainable Wellbeing among Youth: The Moderating Effect of Public Profiles (2020). Hypothesis development and the proposed model.5 Propose a research model.
25 CHAPTER 3: RESEARCH METHODOLOGY. Sample Size Identification. Sampling Selection Approach. Data analysis method.
32 CHAPTER 4: RESEARCH FINDINGS. Sample descriptive statistics:. The appropriate age to retire:. On average, how much money do you spend each month on savings?.
Why do you need to implement a personal financial plan when you retire?. Where are you investing your savings?. What do you think is the right age to start implementing a personal financial plan for retirement?. Descriptive statistics of observed variables:.
Processing scale data and research models. Verify measurement results. Testing the reliability of Cronbach's Alpha scale:. Testing composite reliability coefficient CR (Composite reliability).
Convergent validity test (AVE):. Discriminant Value Test:. Testing the PLS-SEM structural model:. Check for multicollinearity:.
Testing the relationship in the structural model:. 51 CHAPTER 5: CONCLUSIONS, IMPLICATIONS AND LIMITATIONS. For businesses and financial management apps:. For universities and college students:.
Limitations and further research. 1 Summary table of 20 research articles. 1 1 LIST OF TABLES Table 1. Sample descriptive statistics.
Statistical table describing observed variables. Testing the reliability of Cronbach's Alpha scale. Testing composite reliability coefficient CR (Composite reliability). Convergent validity lest (AVE).
The Outer Loadings coefficient. Discriminant Value Test. Distinguishing value of HTMT. Check for multicollinearity.
Testing the relationship in the structural model. Specific indirect effects. Testing the Impact Factor fA2. R2/R2 Adjusted Coefficient Test.
53 2 LIST OF FIGURES Figure 1. The theory of planned behavior by Ajzen, I. Life-cycle consumption theory by Ann c. Research model by The, A.
Research model by Safari, K. Research model by Mustafa, w. Research model by Bongini, p. Research model by Afthanorhan, A.
The proposed research model. The chart combines the appropriate age for retirement - student course (%). The chart combines monthly savings - student course (%). The chart shows the reasons for implementing a personal financial plan in retirement (%).
The chart shows where to invest savings (%). The chart combines the appropriate ages for financial planning - student course (%). 42 3 LIST OF ABBREVIATION AVE Convergent validity test FA Financial Attitude FG Financial Goal FL Financial Literacy IN Intention Post-COV1D-19 Post coronavirus disease of 2019 RPB Retirement Planning Behavior SEM structural equation modeling The Partial Least Squares Structural PLS-SEM Equation Modeling TPB Theory of planned behavior Variance Inflation Factor V1F 4 CHAPTER 1: INTRODUCTION 1. The necessity of research The General Statistics Office has just released a report on the socio-economic situation in 2023.
According to the statistics, the average population of Vietnam in 2023 is 100.3 million people, an increase of 834.8 thousand people compared to 2022. The population structure of Vietnam is shifting towards an increase in the proportion of elderly people and a decrease in the proportion of the young population. Vietnam is currently in a period of demographic transition and at the same time experiencing population aging. Not only in Vietnam, but UNDP's research has also pointed out that the increase in the number of elderly people (aged 60 and above) has significantly risen globally.
Studies indicate that the number of elderly people in less developed regions spontaneously increased by an average of 60% in 2015, and this scale could rise to 71% by 2030. The underlying reason for this increase is the rise in life expectancy in most regions around the world. For this reason, the issue of retirement in developing countries in general and in Vietnam in particular has become an important matter that needs more attention and research. Workers need to start planning for their retirement seriously.
Evidence shows that the monthly pension rale is projected until 2024 as follows: For males: The monthly pension rate is calculated at 45%, corresponding to 20 years of social insurance contributions, and then an additional 2% for each additional year of contributions, up to a maximum of 75%. As for females: This rate is calculated at 45%, corresponding to 15 years of social insurance contributions, and then an additional 2% for each additional year of contributions, up to a maximum of 75%. The Intuit report clearly indicates that the savings and personal investments of individuals born after 1997 are lower compared to those of the generations born 10 years earlier. Particularly, the posl-COVID-19 pandemic has altered perspectives on work and health, prompting many individuals to redesign their lives, with a significant number expressing a desire for early retirement.
According to the report "Readiness for Independent Living in Old Age," conducted by the Institute of Labor Science and Social Affairs and the Institute of Sociology in coordination with the support of Prudential Vietnam Life Insurance Company, over half of the primary working-age group (30-44 years old) in urban areas intend to retire early between the ages of 45 and 55, with 5 approximately 38.93% planning retirement between 55 and below the stipulated retirement age. Additionally, a majority of the workforce lacks financial management knowledge, leading to loss of savings due to inefficient financial tools. Moreover, most Vietnamese citizens acknowledge that they do not have sufficient savings for their retirement. Therefore, the intention for early retirement is not only a personal challenge but also a national-level concern.
Van Rooij et al., 2012 supports the perspective that the influence of financial knowledge and the lack of retirement financial planning diminish wealth, or at least financial well-being, in retirement. (2020) research indicates that individuals with financial literacy are more likely to engage in financial markets and accumulate reserves. In financial viewpoints, the intention to perform a behavior is the willingness of an individual to execute a predetermined plan related to financial matters (Van Rooij et al., 2012), or readiness for retirement when sufficient funds are available (Satsios & Hadjidakis, 2018; Zandi & et al. Consequently, it demonstrates that Financial Literacy and Financial Attitude, or in other words, personal financial preparation, significantly impact the intention to plan for retirement in the future.
According to Stawski el al. (2007), having clear retirement goals is also another psychological factor associated with retirement planning and predicting savings trends. It can be argued that clear goals help US distinctly identify what we want to achieve during retirement. With clear goals, one can plan their finances and lifestyle accordingly to achieve those goals in the future.
According to Sutherland, your desires and values after retirement will be reflected in how effectively you plan your finances with the earnings from your job. In other words, preparing for a life different from previous generations of workers, who relied solely on pensions, the younger generation is becoming increasingly conscious and concerned about managing their personal finances sensibly. Previously, there have been global studies on retirement planning, such as the 2021 research on "Psychological determinants of retirement financial planning behavior" by Sweta Tomar, H. Kent Baker, Satish Kumar, Arvid O.
Hoffmann, or the study "University students and retirement planning: never too early" by Cucinelli, D. However, research on the current status of personal financial 6 preparation for retirement plans in Vietnam is relatively scarce. Therefore, our study is quite novel up to the present moment. Consequently, there are inevitable gaps in the research, including the limited scope of the study, primarily focused on students, which may result in findings that are not fully representative of the entire population.
From the above reasons, we chose the topic “The impact of financial factors on retirement planning among university students in Ho Chi Minh City" to survey. And this research will provide a better understanding of the personal financial preparation of current and future working people planning for retirement in the future. Our research team will provide a comprehensive view explaining the factors that influence employees' retirement planning behavior. From there, it will serve as a basis for relevant individuals and organizations to help people make plans to prepare fully and effectively for retirement.
Research objectives From the issues raised, the research team raised the following questions: 1. What factors influence students' personal financial preparation for retirement and suggested directions? 2. What factors influence students' intention to invest in funds? 3. Are financial preparation attitudes and intentions really influenced by those factors? 4.
On that basis, provide scientific and management implications. Corresponding to the research question, the article is carried out with the following three goals: 1. Build a research model, test a scale of factors affecting students' personal financial preparation for retirement and propose directions 2. Test and measure factors in the model that impact students' personal financial preparation and intention to invest in funds for retirement.
Suggest some recommendations to the administrators 1.1 Research subject Personal financial management practices to prepare for the retirement of students in Ho Chi Minh City.