How to Use Commitment Devices:- • Employer-Sponsored Plans:

How to Use Commitment Devices:-
• Employer-Sponsored Plans: Use employer-sponsored retirement plans, such as 401(k)s, if your employer offers a matching contribution. Automatic payroll deductions ensure saving for retirement will be a priority.
• Automatic escalation: Many retirement plans provide the option for participants to automatically increase their contribution rate every year, so that the retirement savings grow over time without requiring conscious effort.
b. Framing Effects: Reframing Retirement Decisions
The way the retirement options or information are presented can greatly influence decision-making. In behavioral finance, this is known as the framing effect. For example, people are more likely to choose to save more when the choice is framed as "saving 15% of your income" rather than "spending 85% of your income."
How to Use Framing to Your Advantage:-