The Role of Financial Literacy in Financial Management Ability to Prepare The Retirement Independently

Abstract

This study aims to determine (1) the level of financial literacy and the ability to manage the lecturers' finance at the Faculty of Economics and Business UMSU (2) to determine the effect of financial literacy and the ability to manage the lecturers at the UMSU Faculty of Economics and Business on retirement preparation. This research is quantitative descriptive, and this type of research is explanatory research. The study population was 94 permanent lecturers who taught at the Faculty of Economics and Business UMSU. The sample of this study was a saturated sample which was all members of the population into the study sample. The data analysis technique was used Structural Equation Modelling (SEM) analysis with the help of AMOS software. The results showed (1) the level of financial literacy of lecturers was still very low (low level), the majority of which was dominated by female lecturers (2) financial literacy influences financial behaviour with a positive relationship direction (3) financial literacy influences retirement preparation with the direction of the negative relationship (4) the ability to manage finances influences retirement preparation with the direction of a positive relationship (5) financial literacy influences retirement preparation through the ability to manage finances.