Getting Hung Up on Decision Making
Getting hung up on decision-making?
In his now-classic TED talk and book The Paradox of Choice, psychologist Barry Schwarz explained how a large number of choices can feel paralyzing rather than liberating. Faced with too many choices, it seems, many people just shut down and give up. Don’t let this happen to you! If you find yourself feeling overwhelmed by too many choices, there are strategies that can help.
How can I get unstuck?
So how can you overcome the feeling of being overwhelmed by choices when it comes to retirement planning?
- Let an expert guide you. If you haven’t yet consulted a retirement professional, make an appointment. A pro’s guidance can be invaluable in helping you narrow down the universe of investment choices and create a portfolio that makes you happy. Envisioning your retirement future can also help reduce your feelings of uncertainty and anxiety.
- Consider a custom target-date fund or portfolio to simplify your decision-making. Instead of worrying about the right asset allocation, let the investment do the work for you. A custom target-date fund or portfolio will automatically rebalance and adjust its asset allocation from aggressive (more stocks) to conservative (more bonds) the closer it gets to your target retirement year.
- Consider a managed account for an even more hands-off investing experience. With a managed account, you’ll give full control of your account to a professional manager and never touch it again. Managed accounts typically cost more and are more personalized to an investor’s situation than other options.
- Aim for a target. Try to save 10% of your income toward retirement each year. To get there, start saving at least 6%, then increase by 2% each year until you reach at least 12%. And make sure you’re contributing enough to get any matching contributions your employer may offer.
Put these tips to work and soon you’ll be breaking free from “analysis paralysis” — and celebrating each additional step you take toward your goal.