Understanding The Role of Financial Literacy in Retirement Planning among Youth in Sarawak, Malaysia: A Conceptual Framework

Abstract

Retirement planning has become a critical aspect of personal financial management, particularly as life expectancy increases, employment patterns evolve, and dependence on public pension systems declines. In Malaysia, despite sustained national initiatives to enhance financial literacy, many young people especially those in Sarawak remain inadequately prepared for retirement. Recent statistics are concerning: approximately 70 percent of EPF contributors in Sarawak have retirement savings of less than RM10,000, and 60 percent of young individuals are unable to meet an unexpected RM1,000 expense without borrowing. These figures underscore the growing urgency of improving financial preparedness among this group. This study seeks to investigate the determinants of personal retirement planning among Sarawakian youth aged 15 to 30. In particular, it focuses on the influence of financial knowledge, numerical and computational ability, exposure to financial education, and attitudes toward financial products. A cross-sectional survey methodology will be adopted, with data analyzed using Structural Equation Modelling to assess the magnitude and direction of relationships among the variables. The questionnaire comprises sections on respondents’ socioeconomic characteristics as well as validated measurement scales for each construct. The anticipated findings are expected to shed light on the financial literacy levels, attitudes, and planning behaviors of youth in Sarawak, highlighting critical gaps and areas for improvement. For educators and practitioners, the results will offer practical insights for designing targeted financial literacy initiatives that align with the realities faced by young individuals. From a policy standpoint, the study supports the development of region-specific strategies that integrate financial education into broader socioeconomic planning. Overall, this research contributes to the expanding literature on fostering long-term financial resilience among youth in emerging economies.