DETERMINANT OF INVESTMENT CHOICE FOR RETIREMENT PLANNING IN INDONESIA

Abstract

Purpose The purpose of this study is to delineate the determinants factors that affect the investment planning for retirement planning by the productive age in determining their investment instrument. As some of the previous studies have examined in term of the defined contribution pension plan in developed country, this study tries to depict the determinants factors between risk, income and investment advice which affect the investment choice for retirement planning in Indonesia. Methods This study is conducted via questionnaires with 26 items were sent to the Indonesian citizens in the productive age that already has income and ever invested or investing. The analysis performed on 206 responses. The data analysis uses statistical software and Structural Equation Modelling (SEM). Findings The study shows that there are effects of risk and investment advice in deciding to invest in certain investment instrument for retirement planning in by the productive age. Whereby, income as one of the independent factors reveals no effect toward it. Therefore, this research found the risk and the investment advice as the determinant factors of investment choice for retirement planning in Indonesia over productive age respondent. Originality/value This study presents findings on the determinant factors affecting the investment choice for retirement planning in Indonesia as the developing country between productive ages.