When you are used to doing things a certain way, the tendency is to take no action
ASHEVILLE, N.C. (PRWEB) May 02, 2018
A new tool launched at the Center for Retirement Security at Boston College helps taxpayers identify whether they are on track for their retirement goals. Jim Hitt, CEO of American IRA, recently took to the company blog to recommend the tool to Self-Directed IRA investors, writing that many people need clarity to cut through a number of cognitive biases and emotional traps that rise up on the journey to self-funded retirement.
Calling the tool “fun and lighthearted,” but looking at a “serious issue,” Jim Hitt noted that millions of Americans struggle with irrational thought processes and emotionalism as they plan retirement. These kinds of problems can lead to unclear thinking, which in turn manifests as incorrect choices and poor retirement savings habits.
Jim Hitt then went on to quote a recent research report from Deloitte, pointing out several behavioral biases. One of these powerful biases was “inertia,” which is another way of saying momentum. Writes Jim Hitt: “When you are used to doing things a certain way, the tendency is to take no action.” Another emotional trap was the “present bias,” or the tendency to prioritize current desires over long-term needs. This bias is tremendously damaging to many investors’ retirement strategies, especially when it comes to savings rate.
“As a group, Self-Directed IRA investors tend to be a rational bunch,” said Jim Hitt in the article. “But all of us are human, and none of us are immune to any of these cognitive biases.”
The solution is to be aware of these cognitive biases and understand their impact on behavior. Information can also help—for example, the tremendous upswing that comes with compounding interest is a good way to dissuade investors stuck with “present bias,” as it shows there are even greater long-term rewards for consistent retirement investing habits.
For more information on Self-Directed IRA investing, continue to read the posts at http://www.AmericanIRA.com or call 866-7500-IRA.
American IRA, LLC was established in 2004 by Jim Hitt, CEO in Asheville, NC.
The mission of American IRA is to provide the highest level of customer service in the self-directed retirement industry. Jim Hitt and his team have grown the company to over $400 million in assets under administration by educating the public that their Self-Directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals and much more.
As a Self-Directed IRA administrator, they are a neutral third party. They do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents or representatives associated with these firms). They are not responsible for and are not bound by any statements, representations, warranties or agreements made by any such person or entity and do not provide any recommendation on the quality profitability or reputability of any investment, individual or company. The term "they" refers to American IRA, located in Asheville and Charlotte, NC."