The Analysis of Shari’ah-Based Personal Wealth Management in the Retirement Period

Abstract

Purpose: This study aims to get a better understanding of personal Islamic Wealth Management (IWM) by Muslim families who are at retirement age. The concept of the five cycles of IWM is employed to observe the implementation of personal wealth management that has been carried out by the Muslim families. Furthermore, this study is trying to observe the personal wealth management strategy based on Maqāshid al-Sharī’ah in the Muslim families.

Method: The research design used is interpretative case study with qualitative approach. Data is collected from the research participants through semi-structured interviews, observation, and documentation. Then it is analyzed by using four techniques i.e.: domain; taxonomy; componential; and cultural themes. Participants are Muslim families who are at retirement age with selected criteria: the principal (husband) aged 65 years and over; having one wife and children who have lived independently; having financial literacy; and having family financial adequacy at retirement age.

Results: The research shows that participants have implemented most of the components of Personal IWM. The participants are driven to and believe in the principle of working as worship (wealth creation), motivation to protect wealth to feel secure and peace of mind (wealth protection), but participants have limited understanding of Islamic insurance. Further, participants developed their wealth in order to protect its value from future unexpected risks (wealth accumulation); participatory carrying out ZIS in order to obey Allāh's commands (wealth purification), and eventually already planned inheritance law according to Islamic teachings (wealth distribution).

Practical Implication: This case study can be a reference for formulating IWM strategy for retirement planning.  

Originality: There is no much studies conducted using a case study method in the area of IWM that can be applied in the future study.