. Commitment Devices: Making Retirement Saving Irresistible One of the very powerful tools is commitment devices - mechanisms to ensure that people remain committed to a long-term objective, for it creates... Read More
Author: finxl03
Behavioral Finance Strategies for Better Retirement Planning Understanding the above biases is the first step toward improving retirement planning. But there are many practical strategies that an individual may employ to... Read More
. Anchoring Bias:- Relying Too Heavily on Initial Information Anchoring bias takes place when a person relies excessively on the first information he comes across while making a decision. Retirement planning... Read More
Mental Accounting:- Separate Treatment of Retirement Funds Mental accounting is the practice of treating different sources of money or investment accounts as being different even though they are fungible. This is... Read More
Overconfidence Bias:- Overestimation of One's Knowledge or Abilities Overconfidence bias refers to the psychological effect where one overestimates his or her ability to predict outcomes or even his or her level... Read More
• How to Fight Loss Aversion:- Diversify Your Investment The better-diversified portfolio will ease the psychological blow of market moves. By investing in the widest possible spread of different... Read More
How Behavioral Finance Can Improve Your Retirement Planning Retirement planning is perhaps the most important financial decision one ever makes, yet many individuals save too little or make poor investment decisions.... Read More
. Framing Effects: Reframing Retirement Decisions The way the retirement options or information are presented can greatly influence decision-making. In behavioral finance, this is known as the framing effect. For example,... Read More
How to Use Commitment Devices:- • Employer-Sponsored Plans: Use employer-sponsored retirement plans, such as 401(k)s, if your employer offers a matching contribution. Automatic payroll deductions ensure saving for retirement will be a... Read More
Commitment Devices: Making Retirement Saving Irresistible One of the very powerful tools is commitment devices - mechanisms to ensure that people remain committed to a long-term objective, for it creates consequences... Read More