Does Pre-Retirement Financial Literacy Matter to Age 60’s? Evidence from Ghana

Abstract

It is essential for everyone to engage in effective retirement planning. Unfortunately, many people face financial difficulties after retirement due to inadequatefinancial literacy before, during, and after reaching the age of 60. This study empirically investigates the association between financial literacy and retirement planning and public pension management. Using a multivariate regression model on sample data collected from respondents in Ghana, this study shows that financial literacy matters in retirement planning and is positively associated with public pension management. In a developing country like Ghana, with high levels of financial illiteracy among older adults, we find evidence to show that most respondents have prepared for “basic” retirement. Evidence also shows that financial literacy is important for understanding governance, accountability, and transparency in public pension management. For policy purposes, we outline a host of policy recommendations that can enhance retirement planning and financial literacy and cure retirement financial distress.