THE ROLE OF FINANCIAL LITERACY IN RETIREMENT SAVINGS BEHAVIOR

Abstract

Individuals' financial knowledge is a key factor in their retirement savings behaviour. This research looks at the people of Punjab, Pakistan, and how their level of financial literacy affects their choices about saving for retirement. Estimating the per-person effect of financial literacy on retirement savings while controlling for demographic characteristics (age, income, education, married status, and risk tolerance) is the goal of this research, which use descriptive statistics, correlation analysis, and regression models to analyse survey data from 400 participants.  People who are more financially literate are more likely to put money aside for retirement, as shown by the positive connection between the two variables. Retirement savings are also strongly correlated with income and education levels. Still, age had no discernible moderating influence, indicating that financial knowledge has little impact on saves regardless of chronological age. This research highlights the role of financial education programs in enhancing retirement preparedness. The study suggests that policymakers and financial institutions can enhance the financial literacy of households to promote a long-term savings behavior. Future research can investigate other psychological and policy-related aspects of retirement savings decisions.