The impact of psychological characteristics on retirement savings in South Africa

Abstract

This study investigates the relationship between psychological characteristics and cognitive biases with retirement savings behaviour in the context of South Africa. 201 responses were collected through random probability sampling technique from a wide range of industries in the country. A closed ended survey questionnaire was distributed through the University of Witwatersrand student database, which provided a diverse representation of the entire population of 15 million employed South Africans. The study utilized descriptive and inferential statistical analyses, including Pearson correlations and multiple regression analysis to explore associations and relationships between psychological traits, cognitive biases, and retirement savings behaviour. The survey instrument's reliability and validity were ensured using Cronbach's Alpha, confirming the accuracy and consistency of the collected data. The findings of this study highlight the notable positive relationships between psychological characteristics, cognitive biases, and retirement savings behaviour, revealing the underlying factors that influence individuals' financial planning decisions for their retirement. Additionally, demographic variables such as age, income, and education level were found to be influential factors that shape saving habits, emphasizing the multifaceted nature of retirement savings behaviour.