ISSN: 2222-6990
Open access
Having financial knowledge and skills is crucial to enhance financial well-being and make prudent financial choices for future financial needs. All these can be accomplished by equipping individuals with the necessary assistance to manage their savings and expenditures effectively, make prudent investments, and borrow responsibly according their financial goal. The main objective of this study is to examine how wealth advisor employs tax benefits to promote retirement savings plan. For the purpose of this study, only tax benefits section has been analyzed where one open-ended question that was asked respondents to give their viewpoints on the roles played by wealth advisors on promoting retirement savings. Then, the open-ended responses were divided according to the appropriate theme to answer the research objectives. Based on thematic analysis, the main findings of study found mixed roles served by wealth advisors for boosting retirement savings using tax benefits. Furthermore, the study revealed that tax benefits were perceived as playing a crucial role in strategically planning a client's personal taxes by employing a suitable approach to minimize their final tax liability. Based on the results, possessing an understanding of tax laws and regulations, as well as being familiar with investment products that offer tax advantages, is the most crucial factor in promoting and sustaining a retirement savings plan. This implies that having knowledge of taxation among wealth advisors may incentivize them to provide responsible advice on how individuals should save for retirement.
Alaudin, R. I., Ismail, N., & Isa, Z. (2016). Projection of retirement adequacy using wealth-need
ratio: Optimistic and pessimistic scenarios. International Journal of Social Science and Humanity, 6(5), 332-335.
Armour, P., & Hung, A. A. (2017). Drawing Down Retirement Wealth: Interactions between Social Security Wealth and Private Retirement Savings. Santa Monica, CA: RAND Corporation. https://www.rand.org/pubs/working_papers/WR1165.html.https://doi.org/10.7249/wr 1165
Avery, M., & Morrison, R. (2011). Microsimulation as a Financial Literacy Tool: Assessing the
of Decisions to Work, Save, Retire, and Spend. In IMA 2011 Conference Paper.
Beshears, J., Choi, J. J., Laibson, D., Madrian, B. C., & Milkman, K. L. (2017). Does front-loading
taxation increase savings? Evidence from Roth 401(k) introductions. Journal of Public Economics 151, 84-95.
Blaufus, K., & Milde, M. (2021). Tax misperceptions and the effect of informational tax nudges on retirement savings. Management Science, 67(8), 5011-5031.
Bloemen, H. (2008). Private wealth and job exit at older age: a random effects model. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1136191
Bloemen, H. (2010). The effect of private wealth on the retirement rate: an empirical analysis. Economica, 78(312), 637-655. https://doi.org/10.1111/j.1468-0335.2010.00845.
Blundell, R., Emmerson, C., & Wakefield, M. (2006). The importance of incentives in influencing private retirement saving: known knowns and known unknowns (No. 06/09). IFS Working Papers.
Boisclair, D., Lacroix, G., Marchand, S., & Michaud, P. C. (2018). Individual financial returns from Quebec pension plan reform options: Analyzing proposals to renew a second-pillar retirement income program. Canadian Public Policy, 44(2), 134-158.
Braithwaite, V. (2003). Through the Eyes of the Advisers: A Fresh Look at High Wealth Individuals. Taxing Democracy (1st ed.).Taylor & Francis Group.
Burke, J., and Hung, A. A. (2015) Trust and Financial Advice. RAND Corporation, Santa Monica, Working Paper Series (WR-1075). https://doi.org/10.7249/WR1075
Burke, J., & Hung, A. A. (2015). Do Financial Advisers Influence Savings Behavior?. RAND Corporation. http://www.jstor.org/stable/10.7249/j.ctt19w72kb
Caraher, K. (2003). Malaysia: approaches to income security in old age. Social Policy and
Society, 2(4), 295-304.
Carmichael, D. (2023). Wealth accumulation and de?risking strategies among high?wealth individuals. Social Inclusion 11(1). https://doi.org/10.17645/si.v11i1.6136
Chan, M. K., Morris, T., Polidano, C., & Vu, H. (2022). Income and saving responses to tax incentives for private retirement savings. Journal of Public Economics, 206, 104598.
Dimitrov, S. (2021). Role of tax incentives for increase in personal pensions saving. Vuzf Review, 6(4), 169-178. https://doi.org/10.38188/2534-9228.21.4.19.
Disney, R., Emmerson, C., & Wakefield, M. (2010). Tax reform and retirement saving incentives: take?up of stakeholder pensions in the uk. Economica 77(306), 213-233. https://doi.org/10.1111/j.1468-0335.2008.00749.
Engen, E., Gale, W., & Scholz, J. (1996). The illusory effects of saving incentives on saving. Journal of Economic Perspectives 10(4), 113-138. https://doi.org/10.1257/jep.10.4.113
Feng, J. (2014). The effect of superannuation tax incentives on salary sacrifice participation. Economic Record 90(1), 59-73. https://doi.org/10.1111/1475-4932.12131
Friedman, J. (2017). Tax policy and retirement savings. The Economics of Tax Policy, 299-334.https://doi.org/10.1093/acprof:oso/9780190619725.003.0018
Frydman, C., & Camerer, C. F. (2016). The psychology and neuroscience of financial decision making. Trends in Cognitive Sciences, 20(9), 661–675. https://doi.org/10.1016/j.tics.2016.07.003
Gamble, K. J., Boyle, P., Yu, L., & Bennett, D. (2013). Aging, Financial Literacy, and Fraud (November 28, 2013). Netspar Discussion Paper No. 11/2013-066, Available at SSRN: https://ssrn.com/abstract=2361151 or http://dx.doi.org/10.2139/ssrn.2361151
Ghosh, A., & Mahanti, A. (2015). Supporting Investment Advisors: A Knowledge Management Framework for Client and Prospect Intelligence. The IUP Journal of Knowledge Management XII (3), 7-16.
Hatta, M. F. M., Zainorin, N. D. E., Jalaludin, S., Nor, M. N., & Ramli, S. (2022). Financial Robo-Advisor Savings2u for Shariah-Compliant Savings and Investment Application. Journal of Information System and Technology Management, 7 (29), 70- 85. DOI: 10.35631/JISTM.729006
Ingles, D., and Stewart, M. (2017). Reforming Australia's superannuation tax system and the age pension to improve work and savings incentives. Asia & the Pacific Policy Studies 4(3), 417-436. https://doi.org/10.1002
Jamaludin, N., & Gerrans, P. (2015). Retirement savings investment decisions: Evidence from
Malaysia. Journal of the Asia Pacific Economy, 20(4), 644-657.
Kaplan, P. D. (2012). Asset allocation with annuities for retirement income management. Frontiers of Modern Asset Allocation, 275-301.
Lahey, K. E., Kim, D., & Newman, M. L. (2006). Full retirement? An examination of factors that
influence the decision to return to work. Financial Services Review, 15(1), 1.
Lluberas, R. (2007). Labour supply of older workers in the uk: is there a link with pension provision?.Pensions an International Journal, 12(3), 154-163. https://doi.org/10.1057/palgrave.pm.5950050
Martin, T., & Finke, M. S. (2012). Planning for Retirement. Available at SSRN: https://ssrn.com/abstract=2195138 or http://dx.doi.org/10.2139/ssrn.2195138
Mitchell, O. S., & Utkus, S. P. (2003). The role of company stock in defined contribution plans. The Journal of Finance, 58(2), 921-945.
Milton, C. R. J. (2013) Tax Advisors and Conflicted Citizens. Legal Ethics 16 (2), 322- 49, DOI: 10.5235/1460728X.16.2.322
Musto, C., Semeraro, G., Lops, P., de Gemmis, M., & Lekkas, G. (2015). Personalized finance advisory through case-based recommender systems and diversification strategies. Decision Support System 77, 100-111. https://doi.org/10.1016/j.dss.2015.06.001
Nga, J. (2023). Personal Financial Planning : A Comprehensive Guide a Personal Financial Planning in Malaysia (1st edn). Sunway University Press.
O'Brien, L. (2023). The effect of tax incentives on private pension saving. 23/10. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/effect-tax-incentives-private-pension-saving (accessed: 22 December 2023). https://doi.org/10.1920/wp.ifs.2023.1023
Paiella, M., and Tiseno, A. (2013). Evaluating the impact on saving of tax-favored retirement plans. Journal of Pension Economics and Finance, 13(1), 62-87. https://doi.org/10.1017/s147474721300019x
Phillip, F., & Semko, E. (2017). Advising Compulsive Spenders. In Proceedings of the 2000 Annual Conference of the Academy of Accounting and Finance held in Nashville., Available at SSRN: https://ssrn.com/abstract=2998712 or http://dx.doi.org/10.2139/ssrn.2998712
Poterba, J., Rauh, J., Venti, S., & Wise, D. (2007). Defined contribution plans, defined benefit plans, and the accumulation of retirement wealth. Journal of Public Economics, 91(10), 2062-2086. https://doi.org/10.1016/j.jpubeco.2007.08.004
Rogofsky, D., Chard, R. E., & Yoong, J. (2018). Insight into the earned income tax credit and tax- advantaged retirement savings. Soc. Sec. Bull., 78, 1.
Shaikh, A., Deshpande, S., & Attar, A. (2019). Financial Advisors Role in Influencing Investment Decisions-An Empirical Study. Jaipuria International Journal of Management Research, 58-72.
Salter, J. R., Harness, N., & Chatterjee, S. (2010). Utilization of financial advisors by affluent retirees. Financial Services Review, 19(3).
Salter, J. R., & Evensky, H. (2008). Calculating a sustainable withdrawal rate: A comprehensive literature review. Journal of Personal Finance, 6(4), 118-137.
Samanez-Larkin, G. R., Hagen, T. A., & Weiner, D. J. (2014). Financial decision making across adulthood. In E. Bijleveld & H. Aarts (Eds.), The psychological science of money, 121-135. Springer Science and Business Media.
Schieber, S. J. (2014). Tax Subsidies for Retirement Provision: Taking a Broader View Available at SSRN: https://ssrn.com/abstract=2534012 or
http://dx.doi.org/10.2139/ssrn.2534012
Smith, P. A. (2002). Complexity in retirement savings policy. National Tax Journal, 55(3), 539-
553.Available at https://www.proquest.com/scholarly-journals/complexity-retirement-savings policy/docview/203278533/se-2
Weinstein, S. B. Tsai, C. S., & Laurie, J. M. (2003). The Importance of Portfolio Rebalancing in Volatile Markets. Retirement Planning (July-August, 37-42.
Zopounidis, C., Doumpos, M.(2013). Multicriteria decision systems for financial problems. Transactions in Operations Research 21, 241–261. https://doi.org/10.1007/s11750- 013-0279-7
Annual Report KWSP 2019. (n.d.). In
https://www.kwsp.gov.my/annualreport2019/index.en.html.
Laporan Malaysia Strategi Literasi Kewangan Kebangsaan 2019-2023 oleh Suruhjaya Sekuriti Malaysia.
https://www.moe.gov.my/en/menumedia/printed-media/speeches/teks-ucapan-belanjawan-2020.
https://www.pmo.gov.my/prihatin-economic-stimulus-package
(Ismail et al., 2024)
Ismail, Z., Norwani, N. M., Ahmad, R. Y. A. S., & Halim, H. A. (2024). Retirement Savings Plan through Tax Incentives: Insights View of Wealth Advisors. International Journal of Academic Research in Business and Social Sciences, 14(5), 878–887.
Copyright: © 2024 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode