Three behavioural barriers to solid retirement planning, and how you can overcome them
I read with great interest a recently released Ontario Securities Commission (OSC) report entitled Encouraging Retirement Planning through Behavioural Insights. It provides strategies for governments, employers, financial advisers and those planning for retirement to implement to make it easier to become financially independent.
Behavioural finance has risen to prominence recently, in part because of the work of “nudge” economist Richard Thaler, who won the Nobel Prize last year for his pioneering work in the field of behavioural economics. There can be psychological impediments to making financial decisions that are in our own best interest, but there are simple things we can do to encourage behaviour today that leads to better outcomes tomorrow.
The OSC and the behavioural insights team that prepared the report identified several barriers to retirement planning and provided potential remedies. I have narrowed down and elaborated upon my favourites.
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