Psychological Determinants of Retirement Preparation Among the Informal Sector Workers in Ghana: A Moderating Effect of Age and Educational Level

Ernest Obeng; Yusheng Kong

doi:10.47814/ijssrr.v7i7.2129

Ernest Obeng JSchool of Finance and Economics, Jiangsu University, China/Christian Service University, Ghana
Yusheng Kong School of Finance and Economics, Jiangsu University, China

DOI: https://doi.org/10.47814/ijssrr.v7i7.2129

Keywords: Retirement Preparation; Informal Sector Workers; Retirement Goal Clarity; Attitude Towards Retirement; Future Time Perspective

Abstract

The issue of life in old age has become a globally discussed topic because of the changes in the world`s population demographics and the challenges such changes have placed on individual households as well as governments all over the world. There are several challenges associated with life in old age. At this stage of life, the income of the individual usually reduces as a result of his or her withdrawal from active work, he or she feels lonely, and in addition, increases in expenditure as a result of deteriorated health conditions which will require more financial commitment to manage the health conditions. People at this stage of life most times become dependent on their children and family members who may not be adequately financially resourced because of their already existing responsibilities. This study aims to explore the psychological determinants of retirement preparation among the informal sector workers in Ghana. Using a cross-sectional approach, the study collected data from the informal sector workers in the Kumasi Metropolis of the Ashanti Region of Ghana. The region was chosen for the study because it is the most populous region in the country with more than 83% of the people in the informal sector. The Kumasi metropolis is centrally located in the Ashanti Region of Ghana. It is the second largest city in Ghana and the administrative capital of the Ashanti Region. This study used a quantitative research design, using a well-structured questionnaire to collect data from 550 respondents through purposive and convenience sampling techniques, and using structural equation modeling for the data analysis. The study revealed a significant positive relationship between future time perspective and retirement preparation. The study also revealed a significant positive relationship between attitude towards retirement and retirement preparation. However, there was no significant relationship between retirement goal clarity and retirement preparation. In testing the moderating role of age, the findings of the study indicated that while age significantly moderates the relationship between retirement goal clarity and retirement preparation; it does not moderate the effect of future time preparation on retirement preparation. It is recommended that government policy on adult education should cover the syllabus on the need for preparing for retirement as it will help the workers in the informal sector to take the necessary steps to prepare adequately for retirement.

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