Effect Of Financial Literacy On Voluntary Retirement Planning Among Employees Of State Corporations Under The Ministry Of Health In Nairobi County, Kenya

The lack of key financial information has been found to cause people to prepare inadequately for retirement. Financial literacy enables individuals to plan for retirement, make proper choices on pension products and contribute effectively in management of their pension schemes. The objective of this study was to determine the effect of financial literacy on voluntary retirement planning among employees of state corporations under the Ministry of Health in Nairobi County, Kenya. This study adopted a descriptive study design and the target population consisted of all the 8,637 employees working in State Corporations under the Ministry of Health in Nairobi, Kenya. The sample size was 368 respondents proportionately distributed across different state corporations. The study used primary data collected using a questionnaire. Data collected was analyzed using descriptive measures of central tendency including means, percentages, frequencies correlation analysis and the multiple regression analysis. The study established that the respondents had no budget for all their expenditure as indicated by a mean of 2.35, do not have a record of their income with a mean of 2.87, and have no idea on total expenditure on their basic needs every month as indicated by a mean of 2.46. The study revealed that most respondents pay all bills on time before due date as supported by a mean of 2.83, respondents do not had enough savings for old age with a mean of 1.62 and had no other forms of retirement packages apart from pension with a mean of 2.28. Respondents were currently not contributing to a pension plan over and above the mandatory deductions made by their employer since the mean was 1.72. The study concludes that gender influences saving patterns for voluntary retirement among employees of state corporations under the Ministry of Health in Nairobi County, Kenya. Financial literacy was found to have a positive impact on voluntary retirement planning. However the results indicate that other factors such as income levels, age, ...