America Saves Week is Education Opportunity for Employers
By Christine Marcks
Originally Published on BenefitNews.com
Next week, Feb. 22 through 27, is America Saves Week, an annual event to help more Americans learn about good savings behaviors and make a commitment to an important cause: their own financial security.
The fact is, we’re living longer and saving less. It’s not uncommon today for retirement to last 20 or 30 years. And yet, more than half of all working-age households are inadequately prepared for retirement, and the number is climbing, according to EBRI data.
For many, this isn’t news. We have more financial information, education and planning tools available to us today than at any time in history. But despite the steady drumbeat of headlines about retirement planning, we’re still not getting it right. Why is it so difficult to right the retirement ship?
Surprisingly, the answer may lie in how our brains are wired to respond to our environment. In effect, we need to outsmart ourselves, because the odds are already stacked against us.
And here’s why – Prudential research shows us there are five inherent behavioral biases that make employees their own worst enemy when it comes to saving for retirement. They are:
- Not being aware of increasing life spans (longevity disconnect)
- Putting off difficult or time-consuming tasks (procrastination)
- Thinking that bad things only happen to other people (optimism bias)
- Making decisions based on what other people are doing (herd mentality)
- Putting today’s wants ahead of tomorrow’s needs (instant gratification)
