Background: Many countries are becoming aging societies, making retirement planning a critical priority. However, limited financial literacy and financial bias hinder laborers’ retirement planning, particularly in Thailand’s Songkhla Province, which is characterized as a semi-urban, multicultural community and a major commercial center in southern Thailand.
Objective: This study examines the relationship between financial literacy and retirement financial planning, with financial biases and attitudes as mediating variables.
Design and Methodology: Data were collected using a questionnaire administered through fieldwork from 400 formal and informal laborers from Songkhla Province in Thailand. The study used proportionate stratified sampling to collect data, which were then analyzed using structural equation modeling.
Results: Financial literacy did not significantly influence retirement financial planning (β = .17, p = .08), but it significantly influenced financial biases (β = −.66, p < .001) and financial attitudes (β = .45, p < .001). Financial biases negatively predicted retirement financial planning (β = −.42, p < .001) and mediated the relationship between financial literacy and retirement financial planning (β = .28, p < .001). Similarly, financial attitudes positively influenced retirement financial planning (β = .31, p < .001) and also served as a mediator (β = .14, p = .02).
Conclusion and Implications: This study integrates behavioral science and behavioral finance to show how financial literacy shapes attitudes and biases in retirement decisions. The findings highlight its role in improving retirement planning and reducing biases. However, financial literacy alone may be insufficient; thus, policies should promote positive financial attitudes and reduce behavioural biases to enhance effective retirement planning.