Former AFL star Ted Richards reveals what can stop you from getting to your retirement dream

Former AFL star Ted Richards has revealed how different “mental biases” could hold you back from your retirement saving dreams and how to avoid them.

Sneaky saboteurs are working to damage your retirement dreams, and they’re living inside your head.

The good news is that these pests can be tamed by anyone who takes a closer look at their own money mind.

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Behavioural economics specialist Ted Richards, who is director of business development at robo-investment firm Six Park, said “mental biases” that could hold back retirement saving included:

• Favouring more immediate rewards over future rewards.

• Finding it hard to choose between so many super funds and options.

• Basing decisions on what other people did — known as the bandwagon effect.

• Burying heads in the sand to avoid danger — known as the ostrich effect.

“There’s often a lot of noise in the market that makes people feel potential danger,” said Mr Richards, a former AFL football star.

Ted Richards at Six Park …

… And in the 2016 AFL Grand Final parade

But short-term market movements should not worry those with an investment time frame of 20-plus years, he said.

One of his top tips to inspire long-term planning now was to review and sort out investments and then “buy yourself a present as a reward — whatever we can do to increase motivation”.

“The power of compounding interest is fantastic, and the earlier you start, the better.”

Mr Richards said people should be open to the idea that better options were available, and ask others what they were doing with retirement savings.

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“That doesn’t mean you should copy them, but the conversation may provide you with some ideas you might otherwise not have considered,” he said.

“Little things that we can change right now can have immense outcomes to the quality of life that we may have in retirement.”

Wotherspoon Wealth director Simon Wotherspoon said smart people could become highly stressed unless they had a clear plan to reach their short, medium and long-term goals.

Mr Wotherspoon said starting a serious retirement savings plan often felt like a big hurdle “so it’s easier just to say ‘I’ll get around to that sometime’.

“But without a plan, short-term decisions are made until it finally transpires there’s not enough left for the longer term ones,” he said.

Mr Wotherspoon said people should try to understand their money personality, start clarifying their personal goals and how to reach them, and find a source of trusted advice.

“Inability to trust can be an Achilles heel,” he said.

“All of us have a specialty, so you either find people you can trust in each area of need or you must learn how to become very skilled yourself. The other option is to do nothing but doing nothing is a decision because events carry on all around you.”

@keanemoney

Originally published as Former AFL star Ted Richards reveals what can stop you from getting to your retirement dream