Title: FACTORS AFFECTING RETIREMENT SAVING/INVESTMENT ON EMPLOYEES WORKING AT JENDERAL SUDIRMAN STREET, CENTRAL JAKARTA, INDONESIA

Authors: Natalia Ayu Madeta, Febria Nalurita and Hamdy Hady

Abstract: This study aims to analyze the effect of risk tolerance (RT), risk perception (RP), risk aversion (RA) through the relationship between financial literacy (FL) variables and retirement saving/investment (RSI) variables. In addition, the researcher partially adds mediation analysis such risk tolerance which is proven to have a positive relationship between financial literacy and retirement saving/investment. In this study, retirement saving/investment prepares an understanding or desire to realize mature finances in retirement, especially in long- term elections investment. Primary data was used and sourced from filling out 13 questionnaires indicators which were answered through Google form by respondents during May 2022. The research sample was selected using the purposive sampling method that 130 employees were actively working as an employee as group samples. The data analysis that used to test the hypothesis by multivariate statistical analysis method using SEM (Structural Equation Modeling). The results showed that financial literacy had a positive and significant effect on risk tolerance, risk perception, and risk aversion. In addition, the risk perception and risk aversion have a positive and significant impact on retirement saving/investment. Besides that, the results also shown that risk tolerance is proven to be able to mediate positive and significant relationship between financial literacy and retirement saving/investment. On the other hand, risk tolerance has a negative relationship to retirement saving/investment. This study provided information which an employee must have a good understanding of financial literacy. Referring to good financial literacy, an employee will be able to have an appropriate and right retirement saving/investment through the stages of risk considerations such as risk tolerance, risk perception, and risk aversion. The more aware an employee to financial literacy and the higher the employee mastery in potential risks, the greater the opportunity to decide these investments pension.

Keywords: financial literacy, risk tolerance, risk perception, risk aversion, retirement saving/investment.

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