The Tyranny of Choice has been a repeated theme in my writings over the years, this was one of my first about the topic. Even more decisions now than back in 2007.
A lot of the literature I have been reading lately (not just financial stuff) says that the biggest problem most folks have these days, there are TOO MANY choices, which causes decision paralysis (an inability to decide). The first time I heard this theory I thought this was just making excuses, but now that I have time to think about it, this might actually be the case.
Look at RRSP decisions that I need to make:
- Do I create an RRSP for me or a spousal RRSP for my wife? (right now I have both)
- Is it going to be self-directed or something else? (it is self-directed right now)
- Do I put in lump sum payments, or do I set up a per pay cheque withdrawal?
- My office offers RRSP’s, should I open one there?
- Should I opt out of my company’s pension plan so I can have a larger RRSP allowance? (don’t have to decide that any more, the company is dead ending the pension).
- Do I put more money in my RRSP or do I pay down my debt?
That’s a lot of concepts and ideas to think about, and a lot of areas where there is a need to study and read about what my options inside the options are. Another option is to do nothing and figure that my retirement is so far away, that I don’t need to worry about it right now (yes, you guessed it, that is a WRONG answer).
