Inertia. Loss aversion. Confirmation bias. Overconfidence. Recency bias. These are just a few of the jargony-sounding investing behaviors that many of us exhibit that can work against our long-term financial goals.
Whether you understand those concepts or not, cognitive psychologists and behavioral economists — directed by many of the world’s largest financial institutions — have spent the past decade or more actively tinkering with solutions built to overcome these traits, and, hopefully, improve your financial life.
It has quietly become perhaps the largest behavioral science experiment focused on retirement with Millennials and younger Gen-Xers as its central subjects as the first generations to start saving for retirement in such reengineered plans. Now, some of the early results are starting to come in. And they’re pretty surprising.