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Social identity theory describes how an individual’s behaviors and choices are influenced by social group membership, including those related to financial planning. Social group behavior can also be influenced by structural barriers. The primary cause of poverty at retirement stems from the lack of financial planning for retirement. Underprivileged populations tend to have limited access to resources thus, they have difficulty saving for retirement. This study aims to identify barriers to financial planning among underprivileged populations through the framework of the social identity theory.

This qualitative study examines key aspects of retirement planning among underprivileged populations using the social identity theory. Findings were based on 32 in-depth interviews with individuals from the Arab population in Israel.

Four central themes emerged from the interviews, detailing the motivations for financial planning for retirement: social identity, pension literacy, reliance on the national social security network and (lack of) trust in the state and the pension system.

By utilizing the social identity theory, this study identifies potential barriers retirement planning among people from underprivileged populations. Understanding these barriers is vital for policymakers globally, due to the expected increase in the rate of older adults in coming years. Lack of proper retirement planning can lead to an increased rate of poverty among older adults.