Loss aversion, recency bias, status quo bias, conversation bias. There is a laundry list of behavioral biases that can affect your decision making when planning for retirement. Author, consultant, and professor Charles Chaffin joined Robert 'Bob' Powell on Decoding Retirement to break down common biases and discuss how to protect yourself while saving for retirement.

Status quo bias (decoded)

Status quo bias is our natural tendency to stick with what we're familiar with and resist making changes, even when those changes could be beneficial.

"Status quo bias is challenging for us because we're basically hardwired to stay where we are," Chaffin explained. "Now, I don't have to make a hundred different decisions to invest a hundred times. I only have to make one, which is the beauty of living in this digital world. So I could use status quo bias to my advantage."

Confirmation bias (decoded)

Confirmation bias is our tendency to search for, interpret, and remember information in a way that confirms our existing beliefs or preconceptions. It's our inclination to favor information that supports what we already think or believe, while ignoring or dismissing information that contradicts our views.

"Now, when it comes to something like confirmation bias, which everybody wants to talk about, particularly in an election season. We look for news that is confirming our beliefs and all that," Chaffin added. "Basically when it comes to confirmation bias, we're really susceptible. Particularly if you think about early stages of cryptocurrency or some elements of active investing. You know, people will post, or they'll talk about all their wins. They don't always talk about their losses. ... So help them find sources that are going to work for them and kind of limit some of that confirmation bias."

Retirement planning doesn’t mean locking up your money for a rainy day and forgetting about it. Planning your future means reacting to events today. Decoding Retirement gives you the tools to navigate the years ahead, and take action now!

Yahoo Finance's Decoding Retirement is hosted by Robert Powell, and produced by Zach Faulds and Alexander Frangeskides.

Find more episodes of Decoding Retirement at https://www.perfectloveletters.com/videos/series/decoding-retirement.

Thoughts? Questions? Fan mail? Email us at [email protected].

Editor's note: This post was written by Zach Faulds.