Emotional Retirement: Emotion plays a dominant role in individuals’
retirement investing decisions, even if they don’t know it, according to a
recent study by Prudential Financial.
While three of four investors making retirement decisions actually are
affected by emotions to a moderate or high degree, just 35 percent say that
emotions impact their decisions, according to “Behavioral Risk in the Retirement
Red Zone.”
The five dominant emotions affecting investors’ retirement decisions are
fear, regret, inertia, aggressiveness and susceptibility, the study says.
For example, 86 percent of investors who registered highly susceptible to
advice of friends or relatives as indicated by their survey responses said they
would take some or all of their money out of the market if confronted with
significant losses, the study says.
Seventy-five percent would consider an investment product that offered some
type of guarantee, according to the study.
In focus groups of investors, Prudential found that many investors would
prefer to work with financial advisors to better understand their emotions in
making investment decisions.
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