Investing for retirement is one of the most consequential yet daunting decisions consumers face. I present a way to both aid and understand consumers as they construct preferences for retirement income. The method enables consumers to build desired probability distributions of wealth constrained by market forces and the amount invested. I collect desired wealth distributions from a sample of working adults, provide evidence of the technique's reliability and predictive validity, characterize individual- and cluster-level differences, and estimate parameters of risk aversion and loss aversion. I discuss how such an interactive method might help people construct more-informed preferences.
Dan Goldstein is Assistant Professor of Marketing at London Business School and his areas of expertise and research include decision making, consumer behavior, and behavioral economics. He received his PhD at the University of Chicago and he has taught or researched at Yahoo Research, Columbia University, Harvard University, Stanford University, and Germany's Max Planck Institute, where he was awarded the Otto Hahn Medal in 1997.