A Research Proposal to Examine Psychological Factors Influence on Financial Planning for Retirement in China

The global life expectancy rate has increased over time, with China being no exception to this trend. The convergence of a growing elderly population heightened strain on the pension fund system, and inadequate savings represents a considerable obstacle to financial stability. Addressing this challenge requires initiatives to enhance retirement planning and promote individuals’ financial well-being. Consequently, given the challenges above, high-quality financial planning for retirement (FPR) has emerged as a crucial factor for successful aging, underscoring the need for additional research in this area. Despite abundant research on retirement planning, the emergence of behavioral finance and the incorporation of psychological principles into FPR has heightened its significance. Resultantly, there is a growing need to explore this phenomenon further. It is necessary to examine which psychological factors lead to insufficient savings by individuals. The present study aims to assess the psychological factors influencing individuals’ FPR, expanding the explanatory models for retirement savings decisions and behaviors. Using the Capacity-Willingness-Opportunity (CWO) model and supported by image theory and the 3M model, this study focuses on the interaction between future time perspective, retirement goal clarity, risk tolerance, subjective financial literacy, and objective financial literacy as psychological characteristics influence individuals’ FPR. Back translation was used to examine the accuracy of the preliminary translation of research instruments to obtain meaningful results. This translation method was combined with the pretest method of expert reviews and cognitive interviews to increase the survey questionnaire’s validity. A purposive sampling technique was applied to collect data from adults over 23 years old and with a certain income stream in six cities in China. Structural equation modeling (SEM) will examine the hypotheses of direct and mediating effects. The findings will offer implications for financial market regulators, policymakers, and consumers.