Introduction:

There are different studies that express concern about frequency and regularity on retired
people’s financial insolvency. Due to the financial deficits, there is a risk on the sustainability of
pension provisions both, government and private funds[ CITATION Far19 \l 1033 ]. It has also be
conveyed by research that by year 2050, 25% of the global population will be above 65 years old
[ CITATION HeW16 \l 1033 ]. This both issues, the lack of savings and increasing population of
aged people brings liabilities on the pension systems significantly, which leads to low finances
left for support in case of retirees [ CITATION Far19 \l 1033 ]. Still there are many individuals near
retirement who are unprepared, particularly women[ CITATION Bru17 \l 1033 ].

Generally, in comparison to men, females’ transition toward retirement is diversified [ CITATION

Koj16 \l 1033 ]. In perspective to average life span, women outlive men and thus face hardships
during their lives.

Moreover, with the gender discrimination, women indulge in part-time jobs or given their roles
have interrupted work histories that leads to reduced earnings. In spite of being financially
vulnerable, still women are less attentive to the idea of financial planning for retirement
[ CITATION Bur20 \l 1033 ]. The increasing pressure on pension provisions with the aging problem
combined with the lack of savings leads to a challenging situation for women’s financial
security. Therefore, attention is needed on over the retirement format to better understand
females’ retirement planning behavior. Further, a sketch is what is required to initiate design of
effective strategies and reforms in the system.

Researchers expect the global population be mainly in five countries – China, the United States,
India, Japan, and Germany of the oldest individuals as, in 2015, in terms of global population,
these countries hold for nearly 50% of 80 years and older [ CITATION Lyo18 \l 1033 ]. Furthermore,
with greater participation of women at administration and management levels there is a rapid
transition in the economy of India. As per opinion of Datta and Argawal (2017), if women and
men have equal working opportunities, India’s GDP can increase by 27% [CITATION Dat \l 1033 ].
However as per the Global Gender Gap Report 2020, India has fallen from the 108th rank to the
112th rank. It is ranked at 117th position in gender wage equality and 149th position in female
economic participation. In economies as India, financial management requires greater attention.
As already females are facing difficulties in terms of finances. Hence, they should put some
effort in saving a relevant portion of their incomes to deal with future hardships due to lack of
financial dependence [ CITATION Mar15 \l 1033 ]. With the India’s joint family culture there has
been a safe net ensuring the economic well-being of women. However, with increasing
urbanization, the nuclear families’ evolution, and a changing social framework have left the
elderly population vulnerable [ CITATION Aga20 \l 1033 ]. Also, the framework of developed
universal social security system is missing in India. Also, pension funds provide little financial
security which does also covers most of the elderly population [ CITATION Aga20 \l 1033 ].
Personal savings play a critical role in India as the rest of the elderly population relies on
informal mechanisms. The Indian government developed advancing strategies to promote
personal savings, like building the national campaign for financial inclusion and providing with a
saving account to households [ CITATION Lyo18 \l 1033 ]. We need to look beyond it to understand
the factors effecting retirement saving behavior because financial inclusion alone cannot promote
savings. India differs culturally from countries like North America and other western countries
where the majority of retirement planning studies focuses on women [ CITATION Kum19 \l 1033 ].
Consequently, the factors identified as those concerning women’s retirement planning and
savings in developed countries plants a need to evaluate whether there is relevancy in emerging
economies.

Over the past few years, research on retirement planning behavior has gained momentum. The
research literature indicates a direct link of retirement savings with age [ CITATION Ada11 \l 1033 ],
income [ CITATION Kil86 \l 1033 ], education [ CITATION Lee03 \l 1033 ], family structure [ CITATION
Cha10 \l 1033 ] and marital status [CITATION Dam15 \l 1033 ]. There are a few researches which also
identify gender as a strong predictor of retirement financial planning [ CITATION Fis10 \l 1033 ] and
leads to the conclusion that women tend to save less than men. Such studies help to explain that
in terms of gender, who is saving more or less for retirement. However, an important question
that has remained unanswered is, “why are so few individuals saving for retirement?” The
answer to the above question can be found in the psychological mechanism that lay the
foundation of planning and saving behavior. As per Hershey (2004), the influence on retirement
planning behavior is due to demographic factors, and psychological constructs affected by
cultural upbringing, which renders a direct influence [ CITATION Her04 \l 1033 ]. In conclusion,
characteristics in relation to demographic have an influence on financial planning and saving
behavior of individuals.

With the advent of behavioral finance and the discovery of rational financial decision-making,
integrating psychological concepts of financial planning and saving behavior has become more
important [ CITATION Ase19 \l 1033 ]. Recent financial literature research papers have
acknowledged that the crucial role of feelings, and behaviors influence an individual’s decisions
in terms of rationality and maximizing economic benefits. However, in the context of investment
decision-making, writers and researchers have neglected a social network’s role, which is of
significant importance as maintained by individuals [CITATION Ost19 \l 1033 ]. The social and
cultural norms affect women more than men because of strongly affect over them [ CITATION
Gri12 \l 1033 ]. Gender discrimination is commonly felt by women of every age causing them to
depend on their support or dependent networks more heavily than men who are preferred more
than women in administrative roles [ CITATION Wat18 \l 1033 ]. As women are more
communicative in respect to their friendships than men [ CITATION Fox85 \l 1033 ], therefore they
may have more in-depth communication with their social networks. In consequence of this,
women are prone to listen to their close people for planning behavior.

This research and study therefore focus on how financial literacy as a crucial characteristic and
retirement clarity, risk tolerance, and social support as psychology influence the retirement
planning of women in India. It also focuses on professional women because this is assumed that
they have sufficient financial resources and may indulge in financial planning. Doing this
research paper is both academically important and practically relevant. From an academic point
of view, previous researchers assessed that the financial literacy in terms of perceived financial
knowledge rather than actual financial knowledge. This may have led to a bias perception where
subjects might have not properly estimated their financial knowledge.

This study is in particular to practical implications and by developing an understanding of the

relationship in psychology with financial literacy. Also, regulators can wisely convey the
resources to educate on the issue of insufficient financial planning. In recent studies on the topic
of financial vulnerability suggest that often the educational programs fail due to a lack of
knowledge designed to assist them in their direction through the marketplace on how
impoverished consumer’s savings and perception is manifested differently from those in the
western or developed economies [ CITATION Mar15 \l 1033 ]. (To get a better understanding of
retirement planning behavior from a practical perspective, our research addresses an urgent need
for financial market regulators and consumer policy makers around the world. Personal traits like
retirement goal clarity and future time perspective are the results revealed for financial behaviors
for retirement planning and savings, which are further influenced by society and cognitive
abilities such as financial literacy. Therefore, in context, the programs should be developed to
give a holistic but not limited view of financial knowledge and to fully consume and transport
knowledge into responsible behavior. Furthermore, helping opportunities should be made to pull
out the social influence and develop the retirement goal clarity and future time perspective. This
action is important given the vital role played by financial security during and before the period
of retirement [ CITATION Noo09 \l 1033 ] and the ever-increasing responsibility placed over the
shoulders of individuals for financial management and procuring sufficient retirement wealth.
The rest of the paper is organized as follows. We first provide a theoretical background on the
study compiled and then develop the hypotheses. We then move on to explain the research
methodology and present the data analysis and results. Finally, we provide a discussion of our
main findings and conclusions.

Hypotheses development and theoretical background:

Retirement planning means preparing for when a person will be and will leave the labor market
and work-related income will disappear to exist. It can be seen as an approach to strike a balance
between current expenses and reserves to maintain a financial confidence pension. Previous
studies provide evidence of the relationship between retirement planning activities and savings
apps [ CITATION Sta07 \l 1033 ].
In his study Lusardi (2000) conducted a study on American households and found that planning
behavior had a significant impact on savings and patrimonial entities. Households where the
heads of households are assigned some form of retirement planning has amassed great wealth
property and savings compared to family-owned household’s chiefs did not enter into such a
planning [ CITATION Lus00 \l 1033 ].
Mulvey and Shetty (2004) financial planning through the “stochastic multi-stage programming”
model. They argued that investors do not always make rational financial decisions; investors,
especially in the event of uncertainty, rational behavior and eventually succumbed to the choices
that could be made some financial gains. This irrationality in decision making, integration of the
study of the role of emotions and characteristics in financial decision making and initiation of
behavior finance [ CITATION Mul04 \l 1033 ].
Mitchell and Utkus (2004) argued that effective retirement planning largely depends on savings
and investment decisions. These decisions were influenced by several psychological
characteristics [ CITATION Mit04 \l 1033 ].

Hershey, Jacobs-Lawson, and Austin (2013) A model for understanding the determinants of an
effective retirement planning behavior through this model, the authors dimensions, namely
capacity, willingness and opportunity, effectiveness of retirement planning and savings. Its
means capacity cognitive factors that distinguish two individuals from each other, ability,
comprehension, knowledge. Second dimension - willingness - defined by the psychological and
emotional characteristics that provide the impetus to start planning for retirement, and continue
over time. It includes factors such as attitude, clarity. Financial and retirement goals, personality
traits, ethics, virtues and flatness that defines the self-image of the individual. Third dimension,
opportunity includes factors external to the individual, for example availability of employee
retirement plans, various investment options, long-term economic and financial market trends,
tax policies and tax regulations. This model serves as a model for development. Framework of
the current study. It is an abbreviation model that considers different aspects to explain
retirement plan. Also, this model is procedural because takes into account the temporal
dimension. First dimension model capacity is reflected in financial literacy. Willingness In the
model, motivators are based on attitude and perception.
Social norm represented by four psychological traits (clarity of retirement goals, future
perspective, retirement and risk tolerance) and social group support [CITATION Her131 \l 1033 ].

The framework also draws heavily on Beach's image theory. [ CITATION Bea98 \l 1033 ] and
Mowen's 3M theory Motivation and personality [ CITATION Mow00 \l 1033 ]. Both theories are
define of the sequential relationship between personality traits (for example, future tense
perspective), cognitive structures (for example, information and purpose) and behavioral aspects
(for example, planning activity and savings). Beach's image theory assumes that policymakers
take action
according to their principles, morals and personality dimensions (image of salt). They describe
their goals, plans and tactics (orbital image) and must comply with these principles. These goals
motivate or direct the incremental behavioral steps necessary to achieve these goals [ CITATION
Bea87 \l 1033 ]. Likewise, Mowen's 3M theory of motivation and personality proposes that core
traits are the basic building blocks of an individual. Traits resulting from that person's genetics
and early learning [ CITATION Mow00 \l 1033 ]. These basic properties are the compound property
or central feature (future time perspective). Central lines serve as causation
precursor of surface lines (clearness of retirement goal), previous behavioral aspect (planning
and saving).

DEPENDENT VARIABLE:

1.1. RETIREMENT PLANNING BEHAIVOR:

Retirement planning behavior is described as people's behavior towards planning their

retirement. Therefore, attitudes towards retirement can cause the formation of financial savings
intentions to influence retirement planning behavior [ CITATION Jac05 \l 1033 ]. Various factors can
avert or aid retirement planning, and researchers haven't usually determined consistent results.
Research has shown that there are exceptional variables that make women plan for retirement in
another way than men.
[CITATION Her10 \l 1033 ] Financial literacy is one of the best-known determinants of financial
planning for retirement.
Financial literacy has been shown to have a strong positive association with planning [ CITATION
Lus17 \l 1033 ]. However, gender variations were found in the amount of financial information.
Men rated their financial literacy as better than women [ CITATION Her07 \l 1033 ].
MODERATING ROLE:

Financial literacy:

By nature individual characteristics such as financial literacy, mathematics through their impact
on the acquisition of financial know-how and abilities. Gaps in math abilities can be especially
crucial due to the fact that financial literacy may rely on numeracy ability. Gender Differences in
Financial Literacy. Among Hong Kong Workers the gradual shift from defined benefit plans to
defined contribution plans has changed the way people plan for retirement. This change has
increased the responsibility for managing everyone's finances while providing a decent
retirement fortune for the future. Because there are numerous complicated financial instruments,
people must develop a complete how-know of financial products to make knowledgeable
decisions. Obviously, financial literacy performs a crucial position in retirement planning.
Further investigation of the relationship between psychological characteristics and financial
literacy may be a promising and exciting location of research [ CITATION Mur13 \l 1033 ]. Taken
together, they are able to offer a reason for a large gap in various components of financial well-
being.

Hershey and Mowen (2000) examined the effect of psychological factors, economic information
and financial preparedness retirement plan. Main characteristics (awareness, openness, emotional
stability, introversion, materialism, and awakening) central feature (perspective of future time)
and surface feature (financial planning knowledge and retirement issues). Finally, the
measurement criterion was determined represented financial preparation in the form of
retirement savings. Their results showed that the future time perspective strongly influences it.
Financial literacy and retirement readiness [ CITATION Her00 \l 1033 ].

Rolison, Hanoch and Wood (2017), young people with a high future time perspective, prioritize
their goals and achievements of financial literacy. Information gathering behavior is motivated
with a future temporal orientation. Thus, financial education programs Designed to improve
retirement savings behavior, it must be fine-tuned according to the individual's future
considerations [ CITATION Rol17 \l 1033 ].
Several studies suggest that financial literacy can have a strong impact on investment
perceptions. Diacon (2004) shows that individuals' risk appetite differs according to their
financial information. Monetary experts tend to invest in risky investment options. Let go of
people with low financial awareness [ CITATION Dia04 \l 1033 ]. Financial literacy has a positive
effect on stock market participation [ CITATION Van11 \l 1033 ], selection of mutual funds
[ CITATION Mul10 \l 1033 ] and wealth management [ CITATION Hil03 \l 1033 ].

R1a-R10a: financial literacy moderates the relationship among the model constructs.

Cognitive factor:

Cognitive factors are characteristics of someone that affect the way they examine and perform.
Such factors serve to modulate overall performance and therefore are likely to improve as well as
decline. Examples of those cognitive functions are things like attention, memory, and reasoning.
(Whitehall II cohort) series of cognitive tests, consisting of verbal memory, verbal fluency in
abstract reasoning, phonemic and semantic verbal fluency. Good cognitive function is an
important part of healthy aging and independent living. Have some evidence that aging affects
cognitive functions primarily related to executive processing and different capabilities of the
frontal lobe. Therefore, fluent abilities which include memory, processing speed, and spatial
ability tend to decline more rapidly with age than crystallized functions such as vocabulary,
knowledge, and comprehension. Whitehall II study, including repeated measures of cognitive
function up to 14 years before and 14 years later pension. Piecewise models focusing on the
retirement year were used to compare trajectories of verbal memory, abstract reasoning, semantic
verbal fluency and phonemic verbal fluency, before and after retirement. We discovered that
everything cognitive domains decreased over time. (Daniel L. Murman, M.D., M.S) Cognitive
skills generally decline with age. It is vital to understand what changes in cognition are to be
expected. A part of regular getting older and what modifications may suggest the onset of mind
disease. Age-associated changes in synapse structure and characteristics and changes in neural
networks are associated with cognitive changes with aging. Given the growth and importance of
our aged population, it is important to recognize these age-related cognitive changes. Cognition
and effective communication with others in maintaining purposeful independence. The most
significant cognitive changes with normal aging are declines in performance on cognitive tasks,
including processing speed, operating memory, and executive cognitive function, which require
rapid processing or conversion of information for decision making. Cumulative knowledge and
experiential skills are well preserved until old age.
Weschler's (1939, 1955).It is generally believed that older humans are less intelligent than young
people. This perception has been strengthened by much previous work on adult intelligence.
Weschler described and measured adult intelligence from the person's performance on tests of
intellectual ability.
(Jacobs-Lawson & Hershey, 2005) Various factors can avert or aid retirement planning, and
researchers haven't usually determined consistent results. Research has shown that there are
exceptional variables that make women plan for retirement in another way than men [ CITATION
Jac05 \l 1033 ]. [CITATION Her10 \l 1033 ] Financial literacy is one of the best-known determinants
of financial planning for retirement. Financial literacy has been shown to have a strong positive
association with planning [ CITATION Lus17 \l 1033 ]. However, gender variations were found in
the amount of financial information. Men rated their financial literacy as better than women
[ CITATION Her07 \l 1033 ].
2.1. The impact of psychological characteristics on retirement planning behavior.

2.1.1. Future time perspective:

Future perspective is a central personality trait and prominent features. How can we imagine the
future? A high-level perspective of the future. It shows that individuals can visualize their lives
clearly and easily the future. The operationalization of the structure can occur in several ways. It
is based on framework and space, including patience, time preferences (financial literature) and
planning horizon (mental literature).
According to Hersey et al. (2010), future time perspective "central" or "important" personality
traits and harbingers of the future financial planning. It shows its effect by influencing
knowledge and participation in financial planning activities.
[ CITATION Her10 \l 1033 ]. Hastings and
Mitchell (2011) identifies impatience as an important predictor of retirement savings. They
locate that impatient investors or those who choose the present gift tend to invest in short-sighted
fund options [ CITATION Has11 \l 1033 ]. In particular, individuals who recognize greatness in the
present have less savings for the future . Bernheim, Skinner and Weinberg (2001) provide similar
results. They argue that people who score high on time or time reduction enjoy immediate
rewards and are less interested in saving or planning for future retirement [ CITATION Ber01 \l 1033
]. Kerry (2018) examines the antecedents of retirement planning and reveals that future time
perspective and financial risk tolerance are two concepts that are highly relevant to the retirement
planning field [ CITATION Ker19 \l 1033 ].

R1: Future time perspective has a positive relationship with retirement planning behavior.
2.1.2. Retirement goal clarity:

Beach image theory [ CITATION Bea87 \l 1033 ] shows that Individuals develop an ideal image that
determines how they will behave. They like to see themselves in the future and make an effort to
achieve this image. The claim that clarity of goals provides a strong motivation to accomplish a
task is clearly supported in the retirement planning literature. Various studies in psychology
unanimously
agrees that a clear and well-defined goal is very important because it to participate in planning
activities that further develop the individual savings contributions [ CITATION Her07 \l 1033 ].
Although women and men generally have the same number of goals. Women’s goals are more
abstract [ CITATION Her02 \l 1033 ]. Women tend to develop goals and spend more time on
themselves. It is more aimed at recreation and maintaining social relations than men. This type of
behavior perhaps because women socialize differently than men developing and maintaining
interpersonal relationships [ CITATION Eis19 \l 1033 ].

R2: There is a positive relationship between the clarity of retirement goals and retirement
planning.

2.1.3. Attitude towards retirement:

The study was an exploratory attempt to determine what factors are linked to a positive attitude
towards retirement. Variables were examined: perceived readiness for retirement, perceived
financial position at retirement, current life situation assessment, task commitment, level of
social activity, attitude towards the company, number of close friends, variety of people getting
support in retirement, how typically unemployed, current employment status and information
about retirement. These variables were derived from this researcher's general familiarity with the
retirement literature and the varieties of variables studied in the past. Although men see
retirement as a natural progression, controllable to some extent, women are more afraid
unforeseen difficulties that hinder their attitudes and behaviors in the face of such an event
[ CITATION Pou20 \l 1033 ]
R3: There is a positive relationship between Attitude toward retirement and
retirement planning behavior.

2.1.4. Risk tolerance:

RISK TOLERANCE

 [ CITATION Baj96 \l 1033 ], studies examining risk tolerance from a financial perspective, focus on
the investment decision model. Research on women's investment patterns yields conflicting
results. A school of thought thinks that women are risk-averse in portfolio selection. Another
school finds income inequality and financial literacy gap favor boys provide an explanation for
this difference [ CITATION Atk03 \l 1033 ]. Bernasek and Shwiff (2001) and Sunden and Surette
(1998) examine the impact of risk aversion on household economic decisions in the case of
cohabiting or married couples. They record that women undertake prudent investment techniques
and dedicate their wealth to less risky investment alternatives. Because risk and return go hand in
hand, investments in much less risky alternatives produce lower returns and less wealth
[ CITATION Ber011 \l 1033 ] [ CITATION Sun98 \l 1033 ]. Risk tolerance affects both portfolio
alternatives and financial savings trends. Women who are less risk tolerant are less likely to save
in the short term [ CITATION Fis10 \l 1033 ]. Jacobs-Lawson and Hershey (2005) record that higher
tolerance for risk predisposes an individual to develop aggressive retirement savings techniques [
CITATION Jac05 \l 1033 ].

R4: Risk tolerance has a positive relationship with retirement planning behavior.

2.2. Social group support and the mediating role of psychological characteristics on retirement
planning behavior.
[ CITATION Ban77 \l 1033 ] [ CITATION Kop14 \l 1033 ], The social environment affects people. Social
learning theory proposes that early childhood learning and peer agencies such as family
members, friends, and co-workers affect future goals and motivations needed to complete tasks.
Lusardi (2003) confirms that the learning and experiences of close relatives such as siblings and
parents partly shape all forms of financial planning. This factor dominates portfolio selections for
high-yielding assets such as stocks [ CITATION Lus03 \l 1033 ].

Duflo and Saez (2003) display that human beings do not longer randomly learn about economic
possibilities and their economic choices are strongly influenced by their environment. They
performed an experimental study and found that peers at work influenced participation in the
employer-sponsored program. The study included an experiment in which employees were
encouraged to attend an employer-sponsored "knowledge fair" aimed at raising awareness about
the "Tax Deferred Account (TDA)" retirement plan. A few random corporations of employees
received monetary rewards, while others were not even notified of the rewards. Surprisingly,
rewarded employees were able to influence and persuade others to join the program [ CITATION
Duf03 \l 1033 ].

According to Hersey et al. (2010) examined the effect of support from spouses, friends, and
colleagues on financial planning and concluded that social networks do have an effect. This
effect may be indirect and may affect the timing of women leaving the labor market [ CITATION
Ric99 \l 1033 ] or directly and may affect the future time perspective and clarity of retirement
goals. In addition to peer influence, early learning, specifically parental impact, influences
making plans and saving. Parental impact performs an essential function in shaping a person's
personality, beliefs, and attitudes in the direction of life, including finance and economics
[ CITATION Her10 \l 1033 ].
Webley and Nyhus (2006) Examine children between the ages of 16 and 21 and find that
parenting traits such as future direction, awareness and discussion of savings and economics with
children affect the child's economic behavior into adulthood [ CITATION Web06 \l 1033 ].

R5: Social group support has a positive association with retirement

planning behavior.
R6: Retirement goal clarity mediates the effect of social group support on retirement planning
behavior.
R7: Future time perspective mediates the effect of social group
support on retirement planning behavior.

Buss (1989) diagnosed three types of features: “cardinal features, central features, and surface or
stylistic features. Major and central features are integrated at deeper levels and together
determine an individual's distinctive features, while surface features are shallower and their
foundations lie somewhere between core and central features [ CITATION Bus89 \l 1033 ]. Along the
same lines, Hershey et al. (2010) also listed the future tense perspective as one of the "central" or
"important" personality traits and antecedents of superficial traits such as clarity of goals. It also
exerts its influence through an individual's knowledge and involvement in financial planning
activities [ CITATION Her10 \l 1033 ].

R8: Retirement goal clarity mediates the effect of future time perspective on retirement planning
behavior.

[ CITATION Rab10 \l 1033 ], Attitude additionally interacts with other psychological a future time
perspective. Therefore, have a distant future time perspective attitude intention increases
consistency towards the future behavior-oriented, such as planning and saving.

R9: Attitude toward retirement mediates the effect of future time

perspective on retirement planning behavior.

Financial risk tolerance is affected by the future time perspective. According to [ CITATION
Jac05 \l 1033 ] there may be a three-way interaction among risk tolerance, financial planning
knowledge, and future time perspective affecting retirement savings. For people with a short-
term perspective, financial planning information does not have a substantial impact on the
connection among risk tolerance and retirement savings. This approach is that if men and women
have a low expectation for the future, then even in the presence of high financial planning
knowledge, the effect of risk-taking ability on savings will be minimal as the individual will not,
will come far. On the alternative hand, a person with a high time perspective and high or low
financial literacy may feel a significant impact of risk tolerance on their financial retirement
savings.

R10: Risk tolerance mediates the effect of future time perspective on retirement planning
behavior.