Framing Effects: Reframing Retirement Decisions
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, people are more likely to choose to save more when the choice is framed as \"saving 15% of your income\" rather than \"spending 85% of your income.\" How to Use Framing to Your Advantage:- • Positive Framing Frame retirement savings decisions in ways that highlight the benefits of saving. For example, focus on how much you will accumulate over time or what kind of financial freedom you\'ll have in retirement, rather than the sacrifices you may have to make today. • Nudge Theory: The idea of nu