CHAPTER 5 DISCUSSION, CONCLUSION AND IMPLICATIONS
5.3 Managerial Implication
in terms of time horizon and amount required to achieve their retirement goals (Lim et al., 2021). To cope with unanticipated events, the respondents of the research mostly agree that contingency planning including develop financial goals to be well prepared to face the circumstances of job loss are necessary in order not affecting on retirement planning. Due to the effect of Covid-19, the findings found that an achievement of debt-free status become the goals among most of the respondents in this study. Priority in settling debt significant to successful retirement planning since the excess fund after debt repayment could be reallocated into retirement savings system.
Therefore, designing a practical and achievable retirement goal is crucial and exert significant impact for better retirement planning.
OECD, to prevent implement of policy to lose its effectiveness, the refundable income is mandatory to allocate into pension fund.
Education on income shock prediction and management is important preventive step to ensure employed person able to calculate how much is the financial setback they are facing so that sustain retirement planning during the setbacks. Government responsible to encourage growth of diversified side jobs in the nation, as to boost income resources for those shrunk account due to passive business activities. Up to this point, rather than approve licensed foreign workers, government should focus on creating higher competitiveness and high-quality works for local working population.
5.3.2 Financial Literacy
The findings emphasize the significance of financial literacy in retirement planning. As practical implication, the government agencies should be in collaboration to provide financial education and promote awareness at the national level with focused message targeting to the publics at different life stage. According to Creador, Malaysian with almost 70% are in need for the support in financial literacy (Murugiah, 2020). Therefore, it is crucial to address these gaps to promote sound retirement planning among the publics.
The government should take measures in ensuring integrated financial literacy training into the education system from the primary to tertiary level.
The authorities should also improve the understanding of the public on the functions of pension fund system such as the recent EPF payout of 6% in encouraging and motivating the retirement savings contribution (Zainudin
& Kumari, 2022). Meanwhile, it is also crucial in improving in personal financial management of the public by providing adequate financial knowledge including cope with the challenges of economics factors such as income instability, inflation, increasing in medical cost as well as knowledge in interest-compounding, needs of insurance and income sources
diversification in preparing their retirement plan. As such, the initiatives including The National Strategy for Financial Literacy 2019-2023 by the Financial Education Network (FEN) as well as programme by the Malaysian Financial Planning Council (MFPC) are those good leads to promote financial literacy and boost retirement planning in the long-term basis. With adequate financial knowledge, as a result, the public may enhance retirement preparedness to cope with the ever-changing economic condition such as the current pandemic situation. For example, individuals adequate with financial literacy may realize and fill the retirement income gap after the action such as withdrawal from EPF account to enhance retirement security. Hence, the public may emphasize on actions to plan for retirement without solely depend on the EPF pension benefits but having other asset management to plan for retirement.
5.3.3 Savings Behaviour
Savings behaviour is a practice of influence by one’s personal values, which need be nourished among the employed person for a better retirement planning. Social marketing campaign is suggested for government, commercial banks and other related authorities to civilize importance of savings. The design of content is crucial for the campaign. As proven, “TAK NAK” which is a antismoking campaign once proven its effectiveness to influence smoker’s intention to quit from smoking, the key for success is engagement of respondents in cognitive and affective purpose (Lee et al., 2015). In order to achieve behavioural change, exposure rate or frequency of appear must be relatively high among the target population. Greater effect may be achieved if collaborate with commercial banks and insurance agencies to design diversified of savings products with attractive interest rate. Indeed, people are realistic when measuring their own benefits, preferred interest return give sense that by practicing savings behaviour is not sacrifice but an alternative option to earn for something.
5.3.4 Goal Clarity
The practical implications according to the findings of this research suggest that interventions of the authorities as well as awareness of publics in setting desired retirement goals are significant. For financial planners, it is crucial to consistently spread the awareness and advise to wider population on the importance of setting clear and specific retirement goals. The goal clarity is significant to act as a roadmap to build long term wealth in order to achieve life satisfaction post-retirement. Thus, they should help in designing personalized retirement plan tailored to their clients’ goals (Jiménez et al., 2019). For the publics, they are capable to seek professional assistance to involve in retirement planning activities. They could seek help in designing and performing evaluations periodically on their specific goals. As the impact of Covid-19, it is recommended that the temporary market corrections may take into consideration by the public to plan for the alternatives with their personal financial advisor to address with the adverse impact and disruption on their specific retirement goals. Retirement planning is a long-term process, at the same time; they may uncertainty including economic shock such as current pandemic time would disrupt in retirement planning (Hershey et al., 2007). Hence, the public should aware the crucial to increase time frame in wealth accumulation process by starting the retirement planning earlier; therefore, reducing the periodic cash flow required as well as capable to cope with the uncertain to meet their retirement goals.