Abstract
Purpose
This study investigates the retirement funding adequacy of black South Africans and how it can be influenced by family structure, health status, financial literacy and the role of the financial planner.
Design/methodology/approach
A mixed sampling approach was applied to collect data from 441 black South Africans. An exploratory factor analysis (EFA) was undertaken and Cronbach's alphas were calculated to confirm the validity and reliability of the measuring instrument. Structural equation modeling was the main statistical procedure applied to test the hypothesised relationships in the research.
Findings
Most of the respondents reside in informal urban areas or townships. The findings show a significant positive relationship between financial literacy and the retirement funding adequacy of black individuals. The study found that individuals who are concerned about the wellness of their family, health and finances are more likely to maintain their standard of living at retirement. However, the role of the financial planner, among black South Africans, does not influence their retirement funding adequacy.
Practical implications
Black South Africans are attentive to the wellness of their family, health and finances despite the necessity to support nuclear and extended family members. Financial institutions need to consider this aspect when providing financial advice to individuals who have many financial dependents.
Originality/value
This study contributes to the limited understanding on the factors that influence the retirement funding adequacy of black South Africans and it provides recommendations on improving retirement funding adequacy.
This study investigates the retirement funding adequacy of black South Africans and how it can be influenced by family structure, health status, financial literacy and the role of the financial planner.
Design/methodology/approach
A mixed sampling approach was applied to collect data from 441 black South Africans. An exploratory factor analysis (EFA) was undertaken and Cronbach's alphas were calculated to confirm the validity and reliability of the measuring instrument. Structural equation modeling was the main statistical procedure applied to test the hypothesised relationships in the research.
Findings
Most of the respondents reside in informal urban areas or townships. The findings show a significant positive relationship between financial literacy and the retirement funding adequacy of black individuals. The study found that individuals who are concerned about the wellness of their family, health and finances are more likely to maintain their standard of living at retirement. However, the role of the financial planner, among black South Africans, does not influence their retirement funding adequacy.
Practical implications
Black South Africans are attentive to the wellness of their family, health and finances despite the necessity to support nuclear and extended family members. Financial institutions need to consider this aspect when providing financial advice to individuals who have many financial dependents.
Originality/value
This study contributes to the limited understanding on the factors that influence the retirement funding adequacy of black South Africans and it provides recommendations on improving retirement funding adequacy.
| Original language | English |
|---|---|
| Pages (from-to) | 573-585 |
| Number of pages | 13 |
| Journal | African Journal of Economic and Management Studies |
| Volume | 11 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 16 Oct 2020 |