Retirement Planning: Mastering What You Can (And Can’t) Control

Achieving better retirement decisions hinges on understanding two key elements: what you can and can’t control, and how your brain operates.

At Rubino & Liang, we guide clients through an essential retirement planning mindset shift: recognizing what’s within your influence and what isn’t. 

This distinction is critical during the Retirement Red Zone (the 10 years immediately before and after retirement). It’s a time when financial choices have an OUTSIZED IMPACT on your long-term future.  

By focusing on what you can control, you gain clarity while diminishing emotional volatility and knee-jerk reactions that often lead to expensive errors.

Here’s a quick look:

For effective retirement planning decision-making, the control-and-can’t-control framework is a powerful first step, however, it’s not always enough. 

Why?

Because even when people know what they should do, they DON’T ALWAYS DO IT.

The Psychology Behind Retirement Decisions

Retirement planning isn’t just a numbers game—it’s a psychological one too. If you don’t keep your emotions in check, you could end up making costly financial mistakes.

For example, some individuals may:

• Panic and sell investments during a downturn. Or, they delay taking withdrawals out of fear, even when their plans show they’re more than prepared. 
• Start Social Security too early or too late, simply because they “have a feeling” about the markets, government or inflation. 
• Hesitate implementing a sound retirement withdrawal strategy, even when it’s in their best interest.

Why does this happen? 

It comes down to how our brains are wired.

Essentially, cognitive biases take over our decision-making. These biases are MENTAL SHORTCUTS many investors use to make decisions. But, they often lead us astray.

What’s more, they tend to show up when we’re under stress or facing something unfamiliar, like stepping away from a paycheck or navigating a new social landscape after leaving a long-term career.

Here are some frequent biases we help clients navigate, along with hypothetical (but common) examples:

Anchoring Bias

Anchoring happens when we fixate on a specific number or idea, even if it has no real bearing on our personal situation.

Example:

George is convinced he needs $2 million to retire, because that’s what a coworker said he needed. Even though George’s actual plan shows he could retire comfortably with less, he keeps working longer than necessary, putting off the lifestyle he could already afford.

Availability Bias

Availability bias is when you judge how likely something is to happen based on how easily you can recall examples of it, especially if these examples are dramatic or recent.

Example:

Sarah manages her own investments. She keeps seeing news stories about specific tech stocks crashing. Because these stories are vivid and easy to recall, she starts to believe all tech stocks are risky, even though her own diversified portfolio is doing fine. Her fear leads her to sell off these holdings, potentially MISSING long-term growth.

Confirmation Bias

Confirmation bias is our tendency to seek out information that supports what we already believe.

Example:

Linda believes taxes will skyrocket soon. Instead of reviewing actual projections with her advisor, she only reads articles that confirm her fear. As a result, she avoids tax-efficient strategies that could benefit her long-term plan.

Loss Aversion Bias

Loss aversion is our tendency to feel the pain of loss more intensely than the satisfaction of gains.

Example:

Tom’s portfolio is up overall, but one stock he bought last year is down 10%. Even though he’s ahead of schedule financially, he fixates on that single loss. He sells it out of frustration, LOCKING IN LOSSES and veering away from his long-term plan.

Overconfidence Bias

Overconfidence bias happens when someone overestimates their own knowledge, skills or ability to make sound decisions. It often leads to risky behavior or ignoring advice, especially in areas that require long-term planning and expertise.

Example:

Mark has always handled his own investments. After a strong market run, he becomes convinced he can time the next downturn. 

He ignores his advisor’s suggestion to rebalance and reduce exposure, certain he’ll know the exact moment to pull back. But when volatility hits faster than expected, he’s caught off guard, missing the opportunity to protect gains and adjust his income strategy.

Recency Bias

Recency bias causes us to give more weight to recent events than to long-term trends.

Example:

After a few months of market volatility, Janet becomes convinced it’s the new normal. She pauses her retirement income plan and moves everything to cash, just as the market begins to recover.

Lollapalooza Effect: When Biases Collide

In The Psychology of Human Misjudgment, Charlie Munger (Warren Buffett’s longtime business partner) outlined 25 psychological tendencies that shape human behavior, often in ways that influence financial decisions more than we realize.

He warned of the Lollapalooza Effect, which happens when multiple biases act together, amplifying one another and leading to IRRATIONAL OUTCOMES.

Here’s how this can play out in retirement planning:

Bob decides to retire at 55, earlier than originally planned. Several psychological forces combine to drive this decision, even though he hasn’t fully run the numbers:

Anchoring Bias: He fixates on his original retirement budget target of $100,000 per year, even though his lifestyle and costs have changed.

Confirmation Bias: He only seeks advice or reads articles supporting early retirement.

Overconfidence Bias: He assumes he can always pick up part-time work if needed.

Recency Bias: Markets have performed well recently, so he feels financially secure.

Each bias on its own might not influence him significantly. But together, they create a Lollapalooza Effect—a cascade of reinforcing tendencies that leads to an overly optimistic, underprepared retirement.

Next Steps

At Rubino & Liang, we help clients think clearly and make retirement decisions based on longstanding facts, not emotions. That’s why we follow a process, not just a plan.

Our 365 Retirement Plan Process gives you more than a starting point. It’s a framework to stay on track, adjust as life changes and avoid reactive decisions. 

If you haven’t already, start by calculating your PIN (Portfolio Income Needs).

Knowing how much income your investments need to generate each year is the first step toward building a financial strategy that fits your life.

Once you know your PIN, then identify your retirement framework planning track: Shortfall, Stronger or Sharpen, ultimately helping you maximize financial opportunities.

Use the form below to get started.