be kind to your future self
Science may help support your savings journey and provide your future self with the gift of a secure retirement. Research has found that people who interact with digital images of their older selves tend to make better long-term decisions and save more for retirement.
Most of us know that saving for our future is important, but getting started on the savings journey, and sticking with it, can be easier said than done.
Some behaviours that we can adopt for our long-term wellbeing – from saving money to caring for our health – involve trading off other immediate pleasures and rewards. And as humans, we aren’t always good at delayed gratification.
However, research out of the US has found there may be a unique way to help achieve a long-term goal like saving for retirement that involves empathising with your future self.
Picture yourself
Professor Hal Hershfield found that people who interacted with digitally aged photographs of themselves chose to save more of their pay for their retirement than those who hadn’t been shown such images.
Prof Hershfield and his team took pictures of people with happy, sad and neutral expressions and inserted them into a retirement-savings slider tool. The idea was to show users how their decisions affected both their future income and their wellbeing in old age.
Some subjects used the tool with pictures of themselves that had been aged. They set aside 6.8 percent on average of their pay for retirement, versus 5.2 percent for those using a tool with pictures of their current selves.
The research suggests that our brains perceive our future self as an entirely different person. If we think of ourselves like strangers, it can follow that we act in a more selfish or disinterested way toward ourselves. However, if we think of our future selves as someone to whom we are close, we may be happier to take steps for their benefit.
Imagine your future self at the point of retirement. They’ll be you, but older. Imagine what that will feel like. Will your values and priorities be the same as they are now, or different?
Future you
Other research has found that people who wrote letters to themselves 20 years into the future made better long-term decisions in relation to their health.
You may wish to ask yourself questions about your future priorities and consider what you might require to be comfortable in retirement.
When you retire, where do you want to live, and what do you want to do with your time? Once you’ve worked out the type of lifestyle you are aiming for, you may be able to determine the retirement income you’ll need.
Seek advice
This research indicates that imagining yourself in the shoes of future you may help you save more for retirement. Now might be the time to get practical and establish financial supports to look after your future self to help you live your best life.
It’s a good idea to check if your super will provide the retirement income you need. If you think you might be falling short of your retirement income goals, there are ways to get back on track.
Making extra contributions to super, if you can afford to do so, may be a good way to boost your savings and may also have tax benefits, depending on your income.
If you require advice on your retirement needs, please contact one of Active Super’s financial planners. Feel free to contact us on 1300 547 873 or make an appointment to see how we can help.*
*Please note, should you choose to meet with one of our planners and decide to not obtain personal advice, no additional fee will be payable. However, fees may apply should you choose to proceed to personal advice. Your financial planner will discuss any fee payable when meeting with you and, if a fee is applicable, will advise you of the fee should you decide to proceed with obtaining the advice.
Any advice in this article is general in nature and has been issued by LGSS Pty Limited (ABN 68 078 003 497) (AFSL 383558), as Trustee for Local Government Super (ABN 28 901 371 321) (‘Active Super’). This article does not take into account your personal objectives, financial situation or needs. Before acting on it, you should consider the appropriateness of it having regard to these matters. If you would like advice that takes into account your personal circumstances, please contact a financial adviser. Active Super has engaged Industry Fund Services Limited (ABN 54 007 016 195) (AFSL No 232514) (IFS) to facilitate the provision of financial advice to members of Active Super. Advice is provided by one of IFS’ financial planners who are Authorised Representatives of IFS. Fees may apply. Further information about the advice services that can be provided is set out in the relevant Financial Services Guide, a copy of which is available for download at www.activesuper.com.au or by calling 1300 547 873. IFS is responsible for any advice given to you by its Authorised Representatives.
