MODERATING EFFECT OF SELF-CONTROL ON THE RELATIONSHIP BETWEEN FINANCIAL LITERACY AND RETIREMENT PLANNING AMONG COMMERCIAL BANK EMPLOYEES IN ELDORET CITY, KENYA

Abstract

Retirement planning, defined as a goal-oriented behavior where individuals devote effort to prepare for their retirement life, can effectively reduce retirement worry, keep stress under wraps, and enhance retirement preparedness and confidence. However, there is little literature about retirement planning among employees working in Kenyan Commercial banks. To fill this gap, this study aimed to establish the moderating effect of self-control on the relationship between financial literacy and retirement planning among commercial bank employees in Kenya. The study was guided by the following specific objectives: to assess the effect of financial knowledge, financial behavior, financial attitude, and self-control on retirement planning among commercial bank employees in Eldoret City, Kenya. In addition, the study examined the moderating effect of self-control on the relationship between financial knowledge, financial

behavior, financial attitude, and retirement planning. This study was guided by goal- setting theory, social cognitive theory, and behavioral life cycle theory. The study

adopted an explanatory research design, with data being collected from a target population of 1058 employees of 32 commercial banks in Eldoret town. A sample size of 290 respondents was obtained using Yamane’s formula. The study used systematic sampling techniques to select employees as respondents. Data was collected using a structured, closed-ended questionnaire. The researcher ensured the reliability of the research instrument through a pilot study and further confirmed it with Cronbach's alpha, which was above the score of 0.7. Construct validity was assessed using factor analysis, while content validity was assessed by having supervisors and experts in the field review the test items to make sure they were relevant and representative of the content that was being measured. Descriptive and inferential statistical analyses were conducted using SPSS (Statistical Package for the Social Sciences) version 25, with study hypotheses tested through a hierarchical regression model. It was found that Financial Knowledge had a significant positive impact on retirement planning (β = 0.402, p < 0.05), confirming that employees with better financial knowledge are more likely to plan effectively for retirement. Financial Behavior also showed a positive and significant influence on retirement planning (β = 0.182, p < 0.05), indicating that prudent financial actions enhance retirement preparedness. Financial Attitude similarly

exhibited a significant positive effect on retirement planning (β = 0.267, p < 0.05). Self- control not only directly impacted retirement planning (β = 0.174, p < 0.05) but also

moderated the relationship between financial knowledge (β = 0.120, p < 0.05), financial behavior (β = 0.099, p < 0.05), financial attitude (β = -0.047, p < 0.05), and retirement planning. The study concludes that self-control moderates the relationship between financial knowledge, financial behavior, financial attitude, and retirement planning among commercial bank employees in Eldoret City, Kenya. The results of this study can be used by practitioners and policymakers in developing strategies and formulating policies for retirement systems in the workplace. The findings contribute knowledge to the literature and theory related to financial literacy, self-control, and retirement planning.