Navigating Cognitive Dissonance in Retirement Planning and Financial Readiness

Abstract

This study explores the impact of cognitive dissonance on financial decisions, particularly in retirement planning within Coimbatore District. The problem addressed is the widespread challenge individuals face in achieving adequate financial literacy and preparedness for retirement, exacerbated by conflicting perceptions and behaviors. The study's objectives are to assess financial literacy levels, evaluate retirement planning perceptions across demographic groups, and analyze the extent of cognitive dissonance in financial planning decisions. Utilizing a descriptive research design, the study employed a non-probability sampling method, specifically convenience sampling, with a sample size of 127 respondents. Data were collected through structured questionnaires, and analysis was conducted using tools such as simple percentage analysis, descriptive statistics, correlation analysis, ANOVA, and multiple linear regression analysis. The findings revealed a strong understanding of basic financial concepts but highlighted gaps in knowledge about estate planning and investment options. There were significant associations between educational level and retirement planning perceptions, indicating varied financial awareness. The study suggests targeted educational programs and resources to enhance financial literacy and address cognitive dissonance, promoting better financial decision-making. Conclusively, the study emphasizes the need for comprehensive financial education and personalized planning support to help individuals align their current financial behaviors with long-term retirement goals.