Plan continuation bias can cause us to plod ahead with our plans even when changing circumstances warrant a shift in direction. Retirement Director Ben Rizzuto explains how to overcome this cognitive error to help ensure we stay on course throughout our financial journeys.

I recently listened to a podcast about one of the worst oil tanker accidents in history. The oil tanker in question was the Torrey Canyon and the accident occurred in 1967 when the ship steered toward a needle-sharp reef off the southwest coast of the UK known as the Seven Stones.

The tanker eventually crashed into the reef and spilled 25 to 36 million gallons of crude oil. This created a 270-square-mile oil slick that eventually contaminated approximately 50 miles of French and 120 miles of Cornish coasts and killed 15,000 seabirds along with huge numbers of marine organisms.

The interesting thing about the Torrey Canyon incident is that it could have been prevented if the tanker had just turned a few degrees to the south. The problem was that, even though evidence continued to mount showing the current course to be dangerous, the captain had a schedule to keep and had created a plan to reach port in time.

The Dangers of Succumbing to “Get There-itis”

The captain’s plan – and his inability to change it based on the danger that lay ahead – speaks to a phenomenon known as plan continuation bias, informally known as “get there-itis.”  This cognitive bias, which causes us to continue with our original plan in spite of changing conditions and growing evidence that we should reconsider, is often referenced in aeronautics, as it seems pilots can be especially susceptible.1

After listening to the podcast, it occurred to me that continuation bias and the Torrey Canyon incident provide an important lesson for investors. Make no mistake, having a plan in place for your financial present and your financial future is incredibly important. In a recent podcast episode, I talked about how those who have a written financial plan in place, however simple it may be, are 1.2 to 1.4 times more likely to reach their goals2 and feel more confident.3 That is, of course, great news for someone like me who has built a career around encouraging people to develop a plan, create behaviors and reach their goals through them. But what happens if there are rocks ahead? What happens if there’s significant volatility in the markets that leads to significant losses in your portfolio?

If you have a long time horizon, you’ll probably be OK. But as folks get closer to retirement, the time to reach their destination decreases, their urgency increases, and people may do one of two things: They may panic and completely sell out, or they may fall prey to plan continuation bias, which could cause them to stick to their original plan even though new information has entered the equation and a barrier ahead must be navigated. Neither of these two extremes is optimal, and both could lead to disaster in retirement.

Overcoming Continuation Bias

So how can we create a buffer between these outcomes? I think there are two things to consider.

Freelancer standing at her desk, using calculator, taking notes

First, let’s talk about your financial plan. The Torrey Canyon accident in no way is an indictment of having a plan. Plans are important, and I firmly believe investors are better off with one than without one. Without a plan, you and your financial vessel are likely to be tossed around by the changing tides and you may never make any progress toward your goals. But if you have a plan, you need to make sure that you review it periodically to see whether changes have occurred. Has your income level changed? Has your portfolio decreased in value? Has an unforeseen illness led to financial and personal strain? Ask yourself these questions, process new information as it becomes available and make changes if necessary.

There are several strategies researchers suggest for overcoming continuation bias, but working with a financial professional is one that tends to make the most sense in the context of your financial plan. A financial professional can help provide perspective when it’s needed. It’s important that you work together as a team to make sure each party is aware of the other’s perspectives.

A second way to make sure you don’t do the wrong thing at the wrong time – or, as in the case of the Torrey Canyon, nothing at all – is to give yourself a buffer. The simplest way to do this is through an emergency savings account. Simply having cash set aside that can cover 6, 12 or maybe even 24 months of expenses can help investors navigate unexpected crises and their associated costs without completely scrapping the financial plan they’ve put in place.

Whether it’s a “side-car” account that can be added to a retirement plan (which we’ve discussed previously), or a “bucket” of assets in a wealth management account that is in cash or liquid assets, these emergency savings can prove invaluable. Having liquid assets on hand to cover expenses for a few extra months allows you time to think, step back from the ledge and reassess your plan without feeling that you have to make drastic changes or become paralyzed with indecision. It could be like a little extra time for the Torrey Canyon or, to use a more current example, a stockpile of N-95 masks or toilet paper during a pandemic.

Thinking back to the Torrey Canyon, remember that the captain did have time. And yet he plowed toward the Seven Stones for hours without realizing that the plan he had in place wouldn’t work based on the current conditions. The point being, an emergency savings account isn’t going to prevent bad things from happening. The tides of the market will continue to rise and fall and there will still be obstacles to navigate. But having that buffer will at least allow you to look out over the bow of your financial vessel with clearer eyes and change your plan as needed.


1Connor, T. “Plan continuation bias,”, October 8, 2020.
2Murphy, M. “Neuroscience Explains Why You Need To Write Down Your Goals If You Actually Want To Achieve Them,” Forbes, April 15, 2018.
3Williams, R. “5 Ways Financial Planning Can Help,”, August 19, 2020.