psychological impact of retirement

In addition to the anchoring effect that appears to take place in the consideration of one's retirement age, there is also evidence that the ages on which people anchor serve as reference points (Kahneman and Tversky 1979b). For example, prediction errors can result from the impact bias (Wilson and Gilbert 2003), which broadly describes individuals' tendency to overestimate the intensity and duration of their emotions in reaction to positive and negative future events. "Decisions and Revisions: The Affective Forecasting of Changeable Outcomes." Z. whole lives, their sense of self or value may be tied to their jobs or their businesses. This protective feature of delayed claiming has been found to be important in traditional economic models. 2008. As such, future retirees may benefit from considering the experiences others have had in retirement and using these second-hand experiences as predictors of what events may occur in their own retirement.20. 18 While this hypothesis has not been tested in the retirement domain, the fact that over 95 percent of individuals claim retirement benefits at or before their FRA (Song and Manchester 2007) may support the notion that it is psychologically difficult for individuals to remain in the workforce when there is a way out. As a member, you'll also get unlimited access to over 83,000 h�b```b``�b`e`��� Ā Bl@���1�+��O�[��TG|s���9J�%00�}��\������3;$&�h*םc0K�)��]24�^�O_p|����Ǣ�:_�v)��G\���sqF���>O�����N�U��>ng�w,f⏧�ח��Y��A��,��2�Y�q�?����{�E���FSd��K Such a result would be an example of a framing effect (Tversky and Kahneman 1981), which occurs when a change in the surface features of a decision problem leads individuals to make different judgments and decisions. Understanding yourself and what makes you happy is a key part to having a successful retirement. Following this notion, urging individuals to first think about delaying retirement and then think about retiring early could shift claiming behavior to later ages. 0000000016 00000 n James graduated from Trinity Catholic School and holds A-levels in physics, maths, chemistry and an AS-level in English language. A similar procedure may be useful in helping individuals generate retirement-related prospections that are less essentialized. When deciding whether to work extra years, then, mental simulations of such a future are likely to be negatively skewed, potentially leading individuals to leave the workforce sooner rather than later. Findings from previous JDM and behavioral-economics research offer a new perspective on the motivations underlying the retirement decision and may help generate strategies for overcoming some cognitive and emotional factors that can lead individuals to make suboptimal retirement decisions. Responses to Changes in Social Security Rules." Washington DC: Brookings Institution Press and Russell Sage Foundation. The author reviews and highlights such factors and offers a unique perspective on potential determinants of retirement behavior, including anchoring and framing effects, affective forecasting, hyperbolic discounting, and the planning fallacy. In one experiment, Wilson and others (2000) asked participants to write down in a prospective "diary" how much time they might spend performing a number of everyday activities on a specific date in the future. A necessary prerequisite of the retirement decision, then, is the accurate prediction of one's future emotions. Sasha may find, for example, that knitting is not as much fun as she thought it would be and decide to drop it to dedicate more time to volunteering.

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