Analyzing the influential factors on retirement savings behavior within the B40 groups in Malaysia through statistical analyses

The B40 group is extremely affected by the current Malaysian economy, where the standard of living is very high due to the increase in inflation and the price of goods. This situation will affect the attitude towards saving, especially in the long term and also for retirement. This group may be ignorant of the importance of having adequate retirement savings, especially those who rely only on the minimum wage. It’s also believed that a person’s behavior or response to money affects whether or not they decide to save for retirement. Because of this, each person has a different perspective on money and how to deal with it, especially for retirement savings. For that, this study investigates the factors affecting savings decisions for retirement among the B40 groups based on their beliefs and attitudes towards money. A survey approach with a constructed questionnaire is employed to reach the targeted respondents. The questions in the questionnaire consist two sections; socio-economic profile; and factors of interest, which are financial management, social influence, and money attitudes. The factors are on a five-point Likert scale, with 1 representing strongly disagree and 5 representing strongly agree. The study employs several statistical procedures to achieve its objective. The analyses include: 1) frequency table; 2) a contingency table; and 3) the ordered probit model. The results found that financial management, social influence are the main factors in determining retirement savings decisions. However, the findings regarding the relationship between types of monetary attitudes and retirement savings behavior indicated that people’s perspectives on retirement savings varied based on their money attitudes. Therefore, the results are anticipated to be a breakthrough for B40 groups by aiding them in better understanding their financial mentalities and preparing them for a secure future and a comfortable retirement.