Parents' Influence on Retirement Planning in Malaysia

What is it about?

Many studies have indicated that the development of children’s behavior is strongly influenced by their parents’ behavior during childhood. This paper applied the theory of planned behavior as a basis for the analysis of data from a sample of 520 Malaysians aged 18 and over. Regression analysis was used to assess the relationship between parents’ financial behavior and their children’s retirement planning. Results showed that: (a) parents play a significant role as agents of financial socialization for their children’s retirement planning behavior, and (b) saving attitude mediates this relationship.

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Photo by National Cancer Institute on Unsplash

Photo by National Cancer Institute on Unsplash

Why is it important?

This project is important to my field because it highlights the the role of parents as an agent of financial educators for their children’s retirement planning behavior. There are just few studies conducted regarding the importance of parents in children’s financial behaviors. Indeed, children would learn lessons by looking at their parents and learning from them which could have a lifetime impact on their future financial behavior and decision-making ability. And my research is among the first studies that pay attention to parent’s role and its effect on children’s retirement planning behavior and it has been cited in other articles as reference of framework. Findings of my research show that individuals with parents who have planned for their retirement could have high income, so income can be the predictor of saving contribution. The results show that that planning can be shaped by the experience of an individual’s siblings and parents. Experiencing unpleasant events, such as financial difficulties and health shocks at the end of life, frequently prompts people to plan.

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