Behavioral Finance Strategies for Better Retirement Planning Understanding the above biases is the f

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 overcome the above biases in order to optimize his or her retirement savings.
a. 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 for those who may drift away from the objective. Automatic enrollment in a company's pension plan is the kind of commitment device that could force an employee to start saving part of his salary for retirement purposes, often automatically and with minimal further steps required.