Relationship between financial literacy and retirement planning among Nigerian civil servants

Adaobi Jennifer Iloakasia

doi:10.62672/hucse.v2i1.27

Authors

Adaobi Jennifer Iloakasia a:1:{s:5:"en_US";s:127:"Department of Educational Psychology Guidance and Counselling, Nwafor Orizu College of Education, Nsugbe Anambra State, Nigeria";}

DOI:

https://doi.org/10.62672/hucse.v2i1.27

Keywords:

Financial literacy, Retirement planning, Civil servants, Nigeria, Regression analysis, Bootstrapping

Abstract

Retirement planning is one of the most major challenges faced by a significant percentage of civil servants in Nigeria, which can often be explained by the lack of financial literacy and absence of financial management skills. Poor financial literacy can create suboptimal savings behaviour, limited investment options and inadequate life post-retirement. The research adopted a descriptive survey research design to determine the level of financial literacy and retirement planning among civil servants in Nigeria. A sample of 100 respondents was purposively selected, focusing on experienced employees nearing retirement. Data were collected via a structured questionnaire, validated by experts and confirmed reliable with Cronbach’s alpha. Descriptive statistics summarized demographics and variable levels, while regression analysis with bootstrapping assessed the relationship between financial literacy and retirement planning. Diagnostics ensured model validity, confirming a significant positive relationship between financial literacy and retirement preparedness. The results indicate that Nigerian civil servants exhibit high levels of financial literacy (mean = 35.52, SD = 4.89) and retirement planning (mean = 34.89, SD = 5.39) based on (100) respondents and (1000) bootstrap samples. Regression analysis revealed a strong positive relationship between financial literacy and retirement planning (R = .882, R² = .778, F(1,98) = 344.04, p = .000). The unstandardized coefficient (B = .973, SE = .052, t = 18.54, p = .000) shows that a one-unit increase in financial literacy leads to a 0.973 increase in retirement planning. Bootstrapping and collinearity diagnostics confirmed model reliability, while casewise analysis identified minimal influence of outliers, ensuring robust results. The study concludes that improving financial literacy is crucial for effective retirement planning and recommends structured financial education programs to enhance civil servants’ preparedness for retirement.

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