Steps #5 & #6: Improving Long-term Financial Decision-making by Bridging the Psychological Divide Between Today and Tomorrow
Steps 5 and 6 of the eight-part paper series, Improving Long-term Financial Decision-making by Bridging the Psychological Divide Between Today and Tomorrow, delve into the psychological factors that often prompt Canadians to start their pension benefits earlier than necessary: a choice that can significantly reduce their financial security in later years.
This latest paper addresses the cognitive and behavioural hurdles that contribute to a “present bias”: the natural tendency to prioritize immediate needs over long-term benefits. This bias can lead to hasty decisions that fail to consider the vulnerabilities many Canadians experience in later years. Building on previous report findings, this segment offers practical strategies to help retirees overcome these factors and make informed decisions about delaying benefits, ultimately enabling them to secure larger, inflation-protected incomes throughout their retirement.
