Often to the detriment of human decision making, people are prone to an impact bias when making affective forecasts, overestimating the emotional consequences of future events. The cognitive processes underlying the impact bias, and methods for correcting it, have been debated and warrant further exploration. In the present investigation, we examined both individual differences and contextual variables associated with cognitive processing in affective forecasting for an election. Results showed that the perceived importance of the event and working memory capacity were both associated with an increased impact bias for some participants, whereas retrieval interference had no relationship with bias. Additionally, an experimental manipulation effectively reduced biased forecasts, particularly among participants who were most distracted thinking about peripheral life events. These findings have direct theoretical implications for understanding the impact bias, highlight the importance of individual differences in affective forecasting, and have ramifications for future decision making research. The possible functional role of the impact bias is discussed within the context of evolutionary psychology.