In this case, the support of a Financial Advisor This can help us summarize the different options and guide us in comparing possible solutions.
I recently spoke to a person who asked me for clarification: she realized that at her age, it was necessary to start do something for your own pension. Great, better late than never. We evaluated the solution first Occupational pension fund proposed to workers adhering to the national collective agreement of which he is also a part. He connected with his own administrative structure because he wanted to delve deeper into certain aspects. The image he found himself in front of: a health care company with more than 3,000 employees in the region, less than 50 units affiliated to the FPN. Main reason: no one knows anything about it, if no one joins it’s because it doesn’t work, we have time to think about it anyway, so forget it.
Young people, who have the time available for planningthey have difficulty focus on the retirement goal. They legitimately focus on the house, on the car, on creating a family, on valuing their professional role/task, and it is true that this is the case. In this bouquet of events and goals, the starting point can find the space, the flag (as many call it) with which one begins one’s own journey. Pension saving.
Second behavioral barrier: time and results are allies, not competitors
Very often we do not understand that it is above all thanks to time that we obtain the best results and this hypothesis is golden when we talk about supplementary pensions, where the time horizon which accompanies us towards our objective is on average twenty years, no to mention only thirty years. We have a loss aversion when the goal is important, but at the same time we fall into the charm, the temptation, the “promise” of easy money earned in a very short time (ignoring the risks we take). It is therefore more and more common to see situations in which “the pension fund does not do it, because I earn more by purchasing securities directly”. It could also be that I set no limits either to providence or to professional trader skills that each of us has in our luggage… Thus, social savings are seen as a cost, a subtraction of resources that could be used at present for more profitable operations.
Or I end up with people who are accumulating savings with a view to retirement, with a long-term goal of 20 years, and who hold 100% of the position on the Prudent Line, totally opposed to even the slightest share of stocks, because “you can” Not counting on this money does not allow you to be at the mercy of the market.” This is also a legitimate choice, but any operator knows how sensationally harmful this is to the bottom line. It would be enough, by calling on a financial advisor, plan for proper maintenance and rebalancing of your retirement plan depending primarily on the individual’s life cycle and the approach to retirement age.
If we have time on our side, and if we make good choices regarding the pension plan and its distribution, we will certainly obtain results.
Third behavioral obstacle: knowing how to exercise the power of good habits
Here we are faced with the eternal challenge between rationality (or discipline) and emotion.
If we manage to decide to start it and if we manage to start our project, having arrived this far, we will only have to give a value to boredom… the boredom of follow our program in a disciplined manner without giving in to the emotion of wanting to manage our program as if it were a short-term financial investment. A good habit will be to be able to systematically feed our plan with new payments year after year.
Saving is an exercise in discipline, especially when the sacrifice I face today with that saving (not buying a good or service) is transferred to a very long-term project, whose benefits I will reap in many years. We must be aware of the importance of our choice and also the importance of sticking to it, so that our program is always nourished and allows you to reap maximum benefits in the long term. Making it a habit over time is certainly the lightest (least coercive) method of making our social security actions automatic and therefore less expensive.
Behavioral finance she has often devoted herself to social security issues, precisely because it requires a decision-making process and constant commitment over time reap long-term results. And it seems pleasant to me to recall in these lines one of the fathers of this discipline, Daniel Kahneman who died a few days ago. The first psychologist to win the 2002 Noble Prize in Economics.
His contribution paved the way for another psychologist, also winner of the Nobel Prize in Economics in 2017, Richard Thaler. One of his most successful publications is “Nudge”, that is, the slight push.
The principles of the “gentle push” have been applied in the field of social security, with successes exceeding all expectations. Basically, the behavioral obstacles I mentioned earlier have been “bypassed.” a program called SMarT (Save More Tomorrow), launched in the USA in the early 2000s.
The program is as simple as it is effective and is based on 2 principles:
- Workers are automatically enrolled in a benefits plan. They can also decide not to join, simply fill out a form asking not to register. The result obtained was a very high membership rate, because the default option is registration, which allows you to overcome laziness, the typical human inertia. The “tiring” action becomes filling out the form not to join the program and not filling out the membership.
- THE Automatic payments, which are withheld from wages, increase proportionally as the worker’s income increases This “trick” allows the worker to feel satisfied when he receives a higher credit resulting from the salary increase, but at the same time to more or less consciously increase the amount of his contribution to the pension plan, aligning it with the improvement of his salary.
The success of this slight push in the United States has been remarkable.
Here in Italy the situation is decidedly different, so a program me of this magnitude cannot be implemented immediately, but all the actors involved, across information and social security culture can contribute with a gentle and I add “conscious” impulse to raising awareness among young people (and not only them) about retirement savings.