Risk Tolerance and Retirement Planning among Employees of Selected Public Universities in Kenya: The Moderating Role of Financial Self-Efficacy

Abstract

Purpose: The purpose of this study was to examine the relationship between risk tolerance attitude and retirement financial planning and to determine the moderating role of financial self-efficacy among academic staff in selected public universities in Nairobi County, Kenya.

Methodology: The study was anchored on Social Cognitive Theory. The target population comprised 3,390 academic staff drawn from four selected public universities in Kenya. A planned sample of 149 respondents was obtained using stratified random sampling. Structured questionnaires were used to collect data, which were analysed using hierarchical regression.

Findings: Hierarchical moderated regression results showed that risk tolerance attitude had a positive and significant effect on retirement financial planning. The findings further showed that financial self-efficacy significantly strengthens the positive relationship between risk tolerance attitude and retirement financial planning.

Conclusion: The study concludes that risk tolerance attitude is an important predictor of retirement financial planning and that its influence is enhanced when employees possess greater confidence in their financial decision-making abilities.

Value: The study recommends that university management, pension administrators, and financial educators strengthen retirement planning programmes by incorporating financial self-efficacy development, financial goal setting, investment evaluation, and informed risk-management skills.