The Support of Entrepreneurship to Ageing Economic Independence

On entering retirement age, financially independence is dependent on assets capable of generating income, to support daily necessities. The Act No. 11 of 1992 about Pension Fund, stipulates 55 years as the normal retirement age. In Indonesia, only civil servants are guaranteed retirement income as their pension fund is state regulated, while private or state-owned enterprises apply various pension schemes, to help their workers’ achieve independency through personal retirement income earning assets. Hence, entrepreneurship has become one of the alternatives for these workers. This article discusses the potential of workers aged above 20 years to become entrepreneurs, using the General measure of Enterprising Tendency (GET) developed first in 1987-1988 by SallyCaird and Mr. Cliff Johnson at Durham University Business School. This article also analyzes the asset portfolios of workers, as they prepare to retire. The assets analyzed in this article comprises of savings or investments in forms of saving account, deposit account, mutual fund, corporate stock, pension fund, insurance, obligation, saving in cooperatives, non-bank financial institutions and community/individual. The tendency of becoming an entrepreneur is determined by entrepreneurial background of the family, participation in entrepreneurship trainings and depth of knowledge regarding entrepreneurship. However, workers’ inadequate knowledge of the financial sector becomes an obstacle as regards their future retirement plans, further lowering their financial independence after retirement. Generally, ageing people in Indonesia depends on their children or family, although their entrepreneurial tendency increases their probability of starting an enterprise. Early education for workers as regards preparation for retirement is a necessity,as financial literacy emphasizes the importance of financial independence while preparing for retirement, with various alternatives of income sources including the startup of an enterprise .