The determinants of saving behaviour for retirement preparation for the millennial generation / Ratna Juwita … [et al.]

The total pension funds in 2019 were only around 6.03% of the country's Gross Domestic Product. This amount is low compared to other Asian countries. Also, the development of pension funds in Indonesia is still stagnant, especially for voluntary pension funds. The unpreparedness of pension funds harms the future of Indonesian society. The survey found that nine out of ten Indonesians still have to work during retirement to make ends meet. For this reason, it is necessary to research to see what factors determine saving behavior for retirement preparation. Previous studies studying saving behavior related to pension funds have focused only on retired people or women. In Indonesia, research about pension funds is only at the case study stage on certain pension fund products or using other variables in certain cities. The author tries to look at the saving behavior of the millennial generation because the readiness to save for a pension fund indeed starts when someone starts working, not when they enter retirement. The millennial generation is Currently the generation that has started working and has yet to enter retirement age. The author combines psychological factors such as Future Time Perspective and Financial Risk Tolerance with the intelligence factor, namely financial literacy, to see the effect on saving behavior for retirement funds. These three factors have never been studied in the millennial generation and have also not been studied in Indonesia. Therefore, the author tries to address this gap in this study. The research method used is multiple regression using primary data from questionnaires. The data analysis process method was carried out in several stages, including pilot tests, reliability and validity tests, classical assumption tests, descriptive analysis, and hypothesis testing analysis. This study concludes that there is no evidence to support a significant positive relationship between the future time perspective and individual life approaches that focus on the future towards retirement saving behavior in the Millennial generation. In addition, this study also found no evidence that financial risk tolerance has a significant relationship with retirement saving behavior in the Millennial generation. In contrast, this study found that knowledge of financial planning for retirement has an important positive relationship with retirement saving behavior in the Millennial generation. In this study, the respondents are millennials living in the Jabodetabek area (metropolitan area), so the respondent's answers only reflect the responses of some people regarding the behavior of saving for retirement. For Pension Fund Policy Holders, the results of this study can be used as material for consideration and evaluation of the factors that influence people's motivation to plan their pension funds, especially for policies aimed at the Millennial generation. From these new insights, pension fund policymakers can adjust the right approach and optimal strategy by increasing content and access to retirement financial planning literacy to improve people's motivation to join the pension fund program. For non-government pension fund service providers, the results of this study can be used as material for consideration and evaluation of the factors that influence people's motivation to plan their pension funds, especially the literacy factor of financial planning for retirement in the context of marketing approaches and public education or target markets, especially the Millennial generation, to attract people to join pension fund services. The author combines psychological factors such as Future Time Perspective and Financial Risk Tolerance with the intelligence factor, namely financial literacy, to see the effect on saving behavior for retirement funds. These three factors have never been studied in the millennial generation and have also not been studied in Indonesia. Therefore, the author tries to address this gap in this study.