The Influence Of Pension Benefits, Investment Behavior, And Age On Retirement Planning Among Private Sector Employees In Jakarta, Indonesia

Abstract

This study aims to analyze the influence of pension benefits, investment behavior, and age on retirement planning among private sector employees in Jakarta, Indonesia. Retirement represents a critical life phase often accompanied by limited income, yet many private sector employees still encounter financial difficulties due to the lack of early and adequate retirement planning. Preliminary data indicates that more than 60% of employees nearing retirement age do not possess long-term investments and depend solely on pension funds provided by their institutions. Additionally, around 72% have no structured investment planning, a situation worsened by low levels of financial literacy and limited understanding of investment instruments. This research adopts a quantitative associative approach and involves 60 private sector employees as respondents, selected through purposive sampling. Primary data were collected using a Likert-scale questionnaire, which had been previously tested for validity (Pearson correlation > 0.3 and Sig. < 0.05) and reliability (Cronbach’s Alpha > 0.70). Data were analyzed using multiple linear regression via SPSS version 29, preceded by classical assumption tests including normality, multicollinearity, and heteroscedasticity. The results reveal that both pension benefits and investment behavior have a positive and significant partial effect on retirement planning. Age also exerts a positive and significant influence, although its contribution is smaller compared to the other two variables. Simultaneously, the three variables were found to have a significant joint effect on retirement planning, with a coefficient of determination (R²) of 0.551. This means that 55.1% of the variance in retirement planning can be explained by the combined influence of pension benefits, investment behavior, and age. The conclusion of this study is that adequate pension benefits, proactive and well-structured investment behavior, and age-related readiness play essential roles in encouraging private sector employees to develop a comprehensive retirement plan. The study recommends enhancing financial literacy and providing early pension preparation programs for employees in the private sector.