Aging and Financial Literacy: The Interplay of Informal Counselling, Risk Aversion, and Empowerment

Financial planning (FP) is one of the leading challenges for retirees. Research shows a gap in how informal financial counselling (IFC), psychological empowerment, and risk aversion contribute to retirees' FP in the post-retirement phase. This study aimed to examine the role of IFC in retirees' FP, with psychological empowerment as mediator and risk aversion as moderator. A cross-sectional survey design was followed. Data were collected from 490 (66% male, 34% female) government retirees from Punjab, Pakistan. The analysis revealed that IFC significantly contributes to retirees' FP. Additionally, psychological empowerment mediates the relationship between IFC and FP, highlighting the importance of empowering retirees to make financial decisions. Although risk aversion positively influences FP, it does not significantly moderate the IFC-FP relationship. The findings highlight the need for targeted interventions, such as workshops, seminars, peer-group discussions, and accessible financial counselling programs, to enhance retirees' financial preparedness.