INTRODUCTION:

Retirement planning is currently fraught with difficulties because of the basic ageing cycle, different works, rules related to retirement age, societal shifts within families, unforeseen macroeconomic events, rising medical costs, and variousother factors. Proper measures must be taken in response to the poor retirement planning practices by individuals in India, who heavily rely on fixed deposits, Provident funds for employees, and many more sources. These facts demonstrate the growing need for retirement planning among them. The age for retirement in India ranges from 58 to 65, and a few years ago, it went up for some professions.

Because of this, retirees will face difficulties in their daily lives due to poor and a lack of retirement planning. As a result, this study is crucial for generating new knowledge and improving day to day decision making of individuals who are retired. Current study's specific goals are to investigate how demographic variables like age and income relate to retirement planning. India's life expectancy has increased dramatically in recent decades, adding around 2 years to 69.67 for each decade, and it is anticipated that this trend would continue. Due to the expanding numbers, planning for your future is becoming very crucial. It differs from person to person and detected by combining partially varied or unobserved individual behavior and intention (Hanisch-1995). Retirement stage is characterized as a phase during which participation in variousday to day activities decreases (Parsons-1942). It is a phase where engagement in day-to-day activities and admirable behaviors decreases; these roles become more limited or few as the person ages. Without proper planning, retirement life requires ongoing employment or working, as well as a lifestyle that remains the same as it was when the retiree was younger (Law and Lee-2004). Although it's not an easy task, failing to prepare for retirement planning will typically result in some disappointment during retirement (Law and Lee-2004). Consequently, making retirement plan crucial.

Retirement is a phase where individuals choose to leave the workforce and transition into a more relaxed lifestyle. This transition is usually accompanied by financial planning and a shift in daily routines and social activities. Even when the person reaches retirement age, retirement life without preparation necessitates ongoing job or working, and the lifestyle is maintained at a young age. Inadequate retirement planning will typically result in some disappointment during retirement. It is must for new generation hence this study will help in identification of the challenges and possible solution for improving the coverage of Retirement planning products in Indian Context by Young investors.

LITERATURE REVIEW:

Age:

Age is connected to retirement plans and decisions. Age has become a significant and persistent element in how people behave when it comes to retirement planning, (Devaney-1995); (Richardson and Kilty-1989); (Joo and Pauwals-2002). Age can influence how people who are going to be retired plan, modify attitudes and perceptions about retirement (Devaney-1995) and increase retirees' and persons' confidence in their retirement (Joo and Pauwals-2002). Additionally, (Law and Lee-2004) said when people get older and earn more money, they are more motivated to start planning for retirement. According to (Monalto, Hanna and Yuh-2000) the planned retirement age is influenced by the reinforcement received through regular reviews and updates on information related to retirement planning.One more time, it was found that age and income impacts retirement planning behaviorof individuals (Law and Lee-2004). (Devaney-1995) Age and household income are interrelated, according to (Devaney-1995), and can help those individuals who want to retire in the planning process by providing guidance, However, this study contradicts the findings of (Haldeman and Gorham-1995), who discovered that age has a negative association with an individual’s savings, implying that continuous savings is a prevalent habit among youth. Age has also shown to be important in future educational program (Garman and Joo-1998). The importance of age in future educational programs has been demonstrated by (Garman and Joo-1998). Conversely, research by (Xiao-1995) reveals stronger evidence on the factors impacting pre-retired households’ perceptions of sufficient retirement income.According to (Depolo and Zappala-2008), the typical person tends to retire three years ahead of schedule. The gap between the retirement age people expects and the one they prefer is influenced by factors like chronological age, job-related factors, their beliefs about having sufficient income, and their views on retirement.

Income:

In simple terms, Income is the total amount of money a person earns from various sources (Saez and Piketty, Atkinson-2011). This level of income affects a person ‘s spending habits and the amount they save, which in turn affects their investment decisions. Retirement Planning also requires careful tax management as taxation decreases an individual’s disposable income. One option is to enroll in defined contribution retirement plans such as money back plans, Retirement pension plans or other pension schemes offered by post offices and other agencies. The benefits of these plans include dividends, capital gains, tax-deductible contributions etc. This allows individuals to start saving at an early age and build substantial savings for their retirement (Forgue and Garman-2011). Income plays a vital role because an individual must have enough financial resources to plan for retirement life (Richardson and Kilty-1989). Individuals prepare differently for retirement income, according to (Ruhm-1989). Getting an adequate income when you reach retirement age is a difficult task. Furthermore, (Grable and Joo-2001) found that, income often plays a significant role in determining an individual’s attitude towards seeking professional assistance with retirement planning. According to the statistical research, persons with higher incomes are more inclined to take expert advice on decisions related to investment, whereas those with lower incomes are less inclined to seek professional advice on retirement investment decisions. As a result, earnings are inextricably linked to the source of income for retirement (Kilty and Richardson-1989). According to (Anderson, Kim and Kwon-2005), money in general influences people's attitudes and behaviors regarding retirement. Income is a crucial and important criterion in various retirement-related matters, particularly while in a retirement education program and seeking expert financial aid (Garman and Joo-1998).

RESEARCH METHODOLOGY:

Primary data – These are the data gathered from some primary sources, or the place where the data are generated for determining and achieving the objective of the study. We have gathered data through questionnaire survey for achieving our objective.

Secondary data - These data and information are generated by obtaining from various research papers, reviews, news articles and websites which could help to conduct our study more precisely.

Data collection Method – For this study, we developed questionnaires Survey considering all demographic variable and financial literacy of individual for retirement planning decision making to complete the objective of the study.

Sampling Technique – Snowball sampling technique is used for collecting our target sample of respondents. It is non-probability technique in which one respondent refers the questionnaire for survey to invite other respondents to participate in the survey.

Sample size – The sample size for this study is 192 in which Indian youngsters who are aged between 18-30 years old participated in this survey.

DATA ANALYSIS AND INTERPRETATION:

Objective 1) To identify the importance of Retirement planning amongst youngsters:

Are you going to have or having Financial Planning for retirement?

The above pie chart shows the responses to a question about financial planning for retirement. The majority of respondents, 73.4% reported that they are currently having or planning to have financial planning for retirement. This indicates that the majority of young people according to the data are proactive and truly understand that retirement planning is an important task to perform.

In contrast, only 10.9% of respondents reported that they have not planned or are not planning for retirement, suggesting that a small minority of young people are not prioritizing retirement planning. This could indicate a lack of understanding of the importance of retirement planning, or it could be due to other factors such as financial constraints or a belief that retirement is too far in the future to worry about.

Finally, 15.6% of respondents reported that they may make financial planning for retirement in the future, indicating that they are considering this option but have not yet made a firm commitment. Overall, the results of this findings suggest that the majority of young people are taking the necessary steps to plan for their retirement and are prepared to make decisions related to retirement planning.

Do you think retirement planning is important for you?

The data shown above is the result of a survey question asking participants about their thoughts on the importance of retirement planning. The results show that a large majority of participants, 77.1% (37.5%+39.6%), either strongly agree or agree that retirement planning is important for them. This suggests that most of the participants recognize and understand the need to prepare for retirement planning.

On the other hand, 15.1% of participants selected “neutral”, indicating that they have not formed a clear opinion on the matter. This group may benefit from additional information and education on the benefits and importance of retirement planning.

A relatively small percentage of participants, 7.8% (3.6%+4.2%), either disagree or strongly disagree that retirement planning is important for them. This could be due to lack of awareness or understanding of the importance of retirement planning or could be n number of factors varies from person to person.

Overall, the results of the survey indicate that the majority of participants view retirement planning as important and recognize the need to make preparations for it. A small minority have not yet formed a clear opinion and do not see retirement planning as important.

Objective 2) To examine the impact of Income on Retirement Planning: To fulfil this objective, we run a linear regression using SPSS under which Income was taken as the independent and Retirement Planning as the dependent variables.

HYPOTHESIS:

The hypothesis in this case is:

H0 (Null Hypothesis): The impact of Incomeon Retirement Planning is not significant.

H1 (Alternate Hypothesis): The impact of Income on Retirement Planning is significant.

We receive the following SPSS regression output:

Table 1

Model Summary
Model	R	R Square	Adjusted R Square	Std. Error of the Estimate
1	0.089^a	0.008	0.005	0.767
a. Predictors: (Constant), Income

Table 1:

Anova^a
Model		Sum of Squares	df	Mean Square	F	Sig.
1	Regression	1.605	1	1.605	2.509	0.041^b
	Residual	58.811	190	0.639
	Total	60.416	191
a. Dependent Variable: RetirementPlanning
b. Predictors: (Constant), Income

Table 4

ANOVA^A
Model		Sum of Squares	df	Mean Square	F	Sig.
1	Regression	1.288	2	0.429	2.803	0.032^b
	Residual	59.744	189	0.153
	Total	61.032	191
a. Dependent Variable: Retirement Planning b. Predictors: (Constant), Age, Income

Table 6

Coefficients^a
Model		Unstandardized Coefficients		Standardized Coefficients	t	Sig.	95.0% Confidence Interval for B
Model		B	Std. Error	Beta	t	Sig.	Lower Bound	Upper Bound
1	(Constant)	1.934	0.203		9.531	<0.001	1.533	2.334
	Income	0.237	0.106	0.158	2.231	0.027	0.028	0.447
	Age	0.128	0.055	0.165	2.332	0.021	0.020	0.237
a. Dependent Variable: Retirement Planning

The ANOVA table (Table 5) provides information about the output generated through the analysis. Model shown in table no. 5explains some variation in the retirement planning score (F = 2.803, p = 0.032), indicating that the two predictors (Age and Income) have a significant impact on the retirement planning score. In this case, pvalue of 0.032 shows there is a 3.2% chance that relation between age, income, and retirement planning is due to chance, which is below the commonly used significance level of 5%. This means we can reject the null hypothesis taken above and interpret that the predictors do not significantly impact dependent variable and conclude that regression model is a significant predictor of the retirement planning score. Also, the constant (intercept) in the model is 1.934 and is statistically significant, which shows a strong relationship between retirement planning and the independent variables i.e., Age and Income.

In the coefficient table (Table 6), the p-value of Income is 0.027and the p-value of Age is 0.021 both of which are statistically significant. Hence, we can conclude that both Income and Age have a significant impact on Retirement Planning.

FINDINGS:

This study is aimed to find out the importance of Retirement Planning amongst youngsters andto examine whether demographic variables like Age and Income effect retirement planning or not. The analysis of the study shows that there is a significant positive relationship between Age and Income of youths towards their financial planning for retirement. The majority of young people according to the data are proactive and truly understand that retirement planning is an important task to perform.

CONCLUSION:

We can conclude that both factors Age as well as Income play a crucial role in determining an individual's retirement goals and strategies. Age has a direct impact on the time frame in which an individual has to save and invest for retirement. The older a person gets, the less time they must accumulate assets, and therefore, the more aggressively they need to save and invest. Also, income affects retirement planning by determining the amount of money an individual can set aside for retirement. Individuals with higher incomes generally have more disposable income that they can allocate towards retirement savings. This provides them with greater flexibility and a wider range of options for their retirement plans. Overall, the conclusion highlights the importance of considering both age and income in retirement planning. Individuals need to take into account their current age and income, as well as any expected changes in the future, in order to create a comprehensive and effective retirement plan. By doing so, they can ensure a secure and comfortable retirement.

In conclusion, the study highlights the age and income are critical factors in determining retirement planning behaviors and highlights the need for financial education and informed decision making to secure a comfortable and healthy retirement.

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Received on 07.02.2023 Modified on 12.04.2023

Asian Journal of Management. 2023;14(4):293-297.

DOI: 10.52711/2321-5763.2023.00047