Most Behavioral Biases for Retirement Planning Such biases in behavior affect retirement planning by

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, individuals can improve their retirement savings and investment strategies. a. 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 money now rather than putting it in the retirement fund. The psychological pull for present consumption leads to the delay in saving, an insufficient contribution to the retirement fund, and overall lack of security in the long run. 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 or IRAs. Automation reduces t