The Effect of Financial Literacy and Financial Inclusion on Retirement Planning in Jakarta, Indonesia

The existence of pension funds in Indonesia is not as popular as other investment instruments. Based on The Results of The National Survey on Financial Literacy and Inclusion 2016, the financial literacy index of pension funds was 10.91 percent and the financial inclusion index of pension funds was 4.66 percent. It means the public's retirement planning is still on low level. This study aims to determine the effect of financial literacy and financial inclusion on retirement planning. Used a quantitative method with 236 respondents in Jakarta, Indonesia. The sampling technique in this study is non-probability sampling and processed by the method of multiple linear regression analysis by using SPSS 24.0. The results of the study show that financial literacy and financial inclusion have a significant effect on retirement planning, which means that the higher financial literacy and financial inclusion of a person, the better their retirement planning. Besides, the results of the study showed that respondents were dominated by moderate financial literacy, moderate financial inclusion levels, and high retirement planning levels. Based on the results of research, the policy implications are the Government and financial institutions are expected to intensify the socialization to increase financial literacy of public. Also Pension fund managers are expected to be able to intensify socialization and build public awareness about retirement planning.