Attitudes and behaviors towards the individual retirement system from the framework of behavioral finance approach: Case of Erzincan provinance

Individuals are in need of turning some of their income they earnt in actively working period into investments in order to maintain the living standards after retirement too, they have created in line with their earnings. By the virtue of this need, they voluntarily participate in individual retirement systems and tend to earn a second income in addition to their retirement income. Individuals who want to invest their earnings in the individual retirement system can make irrational decisions as a result of psychological and environmental effects. In this context, it is important to investigate the relationship between the individual retirement system and behavioral finance theory, which examines why people constantly make mistakes and make irrational decisions in financial matters. The aim of this research is to examine the financial behavior of individuals participating in the individual retirement system towards the individual retirement system (IRS). In accordance with this aim, a survey was conducted on 464 people living in Erzincan province and participated in the individual retirement system. The survey results were analyzed through SPSS and AMOS programs. The accumulation and IRS scale used in the research consists of three dimensions as the purpose of accumulation, the basic knowledge of the IRS and the approach to the IRS. Behavioral finance tendencies were used in five dimensions as overconfidence, over-optimism, avoidance of regret, loss aversion and representation tendency. As a result of the analysis, it was concluded that the purpose of accumulation of the investors has an effect on all five dimensions of behavioral finance tendencies used in this research. It was revealed that IRS basic knowledge level has an effect on overconfidence, over-optimism and representation tendency. It has been determined that the approach to IRS has an effect on over-optimism, avoidance of regret and representation tendency.