Planning for Retirement
Our own behavior gets in the way
It can be hard to imagine yourself in the future, and for some, your anticipated retirement date (your Day One) may seem very far off. But we all will grow older and many of us will live well past our working years. What are you doing now to prepare for 30 or more years of retirement?
While the best approach may be to make smart investment decisions now, when it comes to retirement planning, our human nature can be our own worst enemy. Our brains are not wired to think ahead, and our natural tendencies get in the way of planning for the future.
Consider these 5 challenges that we all face:
- I might live how long?
It’s likely that you’ll live a long time after you retire. While the challenges of living in the moment seem like enough, we need to better prepare for our future well-being and for a long life ahead.
- I’ll do it later.
It’s human nature to procrastinate. But in some cases, there are steep consequences with putting decisions off until tomorrow. If you start saving for retirement early on, it will be easier than if you delay. Every year you don’t save can potentially make it more difficult to achieve your future retirement goals.
- It won’t happen to me.
It’s human nature to be optimistic. We tend to think bad things only happen to other people. In fact, we are programmed to think that only good things will happen to us. But when it comes to retirement, it is important take into account both the good and bad things that could have an impact on your planning.
- I just can’t resist.
We are highly social beings, and we care about what other people think and do. When everyone else is doing something, we assume there’s a good reason, and we follow along. But sometimes that can get you in trouble, especially when it comes to investment decisions that should be influenced by your individual goals and your unique life path, not group thinking.
- I want it now.
The desire for instant gratification is something we experience as children and never fully outgrow. That’s human nature and it’s not easy to control.
See how too many choices, complexity and uncertainty can lead to emotional overload that negatively impacts our ability to make good decisions.
Consider your future
In spite of these challenges, there is much you can do to help address your retirement dreams. But for most people, managing growth and stability in the years leading up to and through retirement can seem daunting. Prudential Day One Funds can help you to do that by providing an investment approach that can help take some of the complexity out of retirement planning.