Lack of access to a workplace pension plan often means lack of understanding about retirement-related issues, including how much income one will need in retirement and what kind of investments to make, writes Angela M. Antonelli for Market Watch.
Richard Thaler, who recently won a Nobel Prize for economics, explains in his book, Misbehaving – The Making of Behavioral Economics, the many reasons why people “often fail to save for retirement,” she writes.
“These include inertia that keeps people from even taking action to begin to save; loss aversion that keeps people from taking actions that reduce their paycheck; and a short-term focus on actions that provide immediate gratification rather than planning for the future,” adds Antonelli.
These and other factors often derail good intentions to save for retirement, resulting in a lack of adequate retirement income and contributing to a crisis of retirement insecurity.
Measures to ‘nudge’ people to save for retirement include auto-enrol and auto-escalation, tools that can be better used by policymakers, she writes.
More: Financial literacy can “make a big difference.”

ARIA provides a forum for an informed discussion on retirement income adequacy, and other related issues, including pension and retirement coverage, and defined benefit pension plans – ARIA pensions blog, 12 Dunlop Street, Barrie, ON, L4N 1V6 –

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