Rafal Chomik, Gaoyun (Sophie) Yan, Kaarin Anstey, and Hazel Bateman
This research brief assesses how these decision processes can go wrong and how we can put them right. It evaluates the age profiles of financial literacy and cognitive ability on the one hand and behavioural biases and mental shortcuts on the other. In doing so, it describes the types of interventions that help boost our abilities and nudge our behaviour, improving financial decisions in the process.
The focus of this brief is on decisions related to personal retirement finances, which in Australia are overwhelmingly about superannuation – the individual savings pillar of the retirement income system (even though housing assets make up a greater proportion of wealth). Much of the presented research relates to super, with considerable attention given to the topic of the moment: the decumulation of super. But examples touch on and can be applied to other financial decisions related to housing, insurance, aged care, and retirement from work.