I read two books over the holidays that, while written for a general audience, can provide crucial insights into retirement planning. The first was a biography of two brilliant psychologists called “The Undoing Project,” by Michael Lewis. The second was “Time Travel: A History,” by James Gleick.
How are books about psychologists (Kahneman and Twersky) and time travel related to retirement plans?
My own insight is that a successful retirement is mostly about making decisions in the present – a lot of them financial – combined with a vision of how you want your future to look. If people understood how the decisions they made today influence their future, they would create a more secure and financially rewarding retirement for themselves and their families.
Lewis’ book suggested that people often make less-than-rational decisions, especially when comparing alternative choices. And when it comes to money, it’s even more challenging.