Financial retirement planning of government employees in Tanzania: Moderating effect of financial decision behavior

The study examined financial retirement planning of government employees in Tanzania: Moderating effect of financial decision behavior. The study applied a cross-sectional survey strategy, positivist paradigm and deductive approach. The study collected quantitative data through questionnaire from government employees working in different ministries within Dodoma region in Tanzania. The study examined whether the moderator moderates the relationship between independent variables (computation capability, financial knowledge, financial education and risk attitude towards financial products) and dependent variable (retirement planning). Data analysis was through Smart PLS-SEM path modelling. The study findings were that financial decision behavior had statistically significant positive moderating effect (p=0.013) on retirement planning. Moderating effect of financial decision behavior on the relationship between risk altitude towards financial products and retirement planning found to be a theoretical contribution of this study as it supports behavioral finance advocates who asserts that the theory of expected utility is an incomplete model since it lacks individual behavioral aspects. This study has incorporating a moderating variable financial decision behavior borrowed from the theory of planned behavior, which has indicated a significant moderating effect that has widened the explanatory power of the theory. This study offers pertinent insights for policy makers concerns on reviewing policy guidelines by government regulators and professional bodies, to advocate for employee’s savings and investment behavior, employees access to a range of financial products, regular training on financial products available in the financial market for better investment decision. Lastly, practitioners and academia can use the results of this study for future references.