Behavioral Finance

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The psychology of decision making

How information is presented, or “framed,” and other personal biases affect decision-making. The TIAA Institute focuses on such issues as how to motivate people to make decisions about when to claim Social Security, whether or not to annuitize, and how to save for retirement. 

Insights

July 2013

Given the widespread transition from defined benefit (DB) to defined contribution (DC) retirement plans, Americans increasingly face the challenge of assessing whether their saving behavior is likely to provide a secure retirement.

January 2013

Annuities are not popular despite providing valuable insurance against outliving one’s savings.

November 2010

Advisors need to understand the way investors think about decisions and the process through which decisions are made.

Research Reports

June 2018

Conventional economic models assume that investors confronted with risky choices maximize expected utility; yet in the real world, people are prone to making predictable errors.

February 2018

Procrastination keeps employees at the default contribution rate, but only in “opt-out” plans.

June 2016

More than 30 million Americans are projected to retire in the next decade – and most have not saved nearly enough for retirement. Moreover, almost half of all Social Security recipients claim benefits at the earliest possible age (62), which can greatly reduce their total lifetime benefits.