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 can... Read More
Author: finxl12
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
• 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
Loss Aversion:- The Fear of Losing Money Loss aversion happens when people tend to feel a more painful pain of loss than the gainful pleasure of a gain. The retirement planning... Read More
Methods to Overcome Present Bias A key way to overcome present bias is through the automation of retirement savings through payroll deductions or direct transfers into retirement accounts such as 401(k)s... Read More
Present Bias:-The Preference for Current Gratification Present bias is the tendency of preferring present rewards over later rewards. It is the main problem in retirement planning. People prefer to spend the... Read More
Most Behavioral Biases for Retirement Planning Such biases in behavior affect retirement planning by providing a suboptimal finance decision. By recognizing the biases, as well as undertaking steps to combat them,... Read More
Understanding Behavioral Finance Behavioral finance draws on psychology, economics, and finance to understand how human beings make financial decisions. Unlike traditional finance that assumes people are rational agents always maximizing utility,... 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
Behavioral finance has really transformed the way we approach personal finance and retirement planning. Knowing the cognitive biases and emotional tendencies that influence our financial choices and addressing them enables... Read More