Overcoming Anchoring Bias: Review Assumptions Periodically Retirement planning is an adaptive process that demands periodical reviewing. Set up the practice of regularly reviewing and altering your savings rate, investment strategy,... Read More
Author: finxl03
. 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
Overcoming Mental Accounting:- • Consolidate accounts:- If possible, consolidate retirement accounts to make savings more streamlined and efficient. This approach makes it easier to monitor your overall progress and avoid unnecessary fees... 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... Read More
How to Combat Overconfidence:- • Seek Professional Advice: It can be countered by consulting with a financial advisor. A financial advisor can provide objective recommendations based on data and help set expectations... 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
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