In this episode, Trevor Lawson concludes the mini-series on cognitive biases by examining how they influence the decision of when to claim Social Security benefits, often leading individuals to underestimate their life expectancy. Drawing on an article by Rick Kahler, Trevor discusses how the availability heuristic, shaped by immediate examples like untimely deaths or media coverage, can lead people to overestimate the likelihood of dying young. He also explores optimism bias and pessimism bias, which affect our perceived likelihood of positive or negative outcomes for ourselves. Additionally, Trevor highlights present bias or temporal discounting, where immediate financial gains from early benefits seem more attractive than larger, delayed benefits. He emphasizes that a reluctance to discuss death may also contribute to this underestimation. Trevor concludes by stressing the importance of being aware of these biases to make informed, long-term financial decisions, especially regarding Social Security.

Reference:
https://www.advisorperspectives.com/articles/2024/06/18/life-expectancy-dont-let-brain-shrink-retirement-benefits

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Retirement With/On Purpose is hosted by Trevor Lawson and produced by Walk West.

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