Money

How our brains may be hard-wired against saving

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Most people wouldn't give thousands of dollars to a stranger, sight unseen. Unfortunately, that's exactly how 56% of adults see their future selves, according to Prudential Retirement: as strangers.

"As an individual, you really don't have the capacity in your brain to connect to the person you are going to be 20, 30, 40 years in the future," said Jennifer Putney, vice president of participant engagement.

Prudential calls the idea "longevity disconnect bias," and it can present a problem for people saving for their retirement. They see it reflected in the 2016 Prudential Challenge quiz, where a little more than half of its 48,000 respondents said, "I might live how long?" when asked to articulate their reluctance to save.

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Behavioral science researchers tested the longevity disconnect theory by showing people photos of their own faces, "aged up" with photo-manipulation software. In response, the subjects' brains responded as though they were looking at strangers.

Mark Goulston, a clinical psychiatrist and author of Talking to Crazy: How to Deal With the Irrational and Impossible People in Your Life, said the theory is related to the idea of object constancy: the ability to maintain a connection to an idea in the face of disappointment, anger or fear. Some people just don't have strong connections to their future selves, he said.

Retirement planning is hard, Putney said. So a tool like Prudential's MapMyRetirement may be eye-opening. The act of plugging in financial figures and seeing the potential costs of retirement can spur people to cozy up to the "stranger" they will one day become, she said. Some other highly regarded tools include LifeReimagined.org, by AARP, and Yodlee's MoneyCenter.

Regret can also be a powerful teacher, Goulston said. "Think of instances you've already lived through where not planning led to something disastrous," he said. Thus primed — and perhaps chagrined — adults may think more clearly about retirement, he said.

That may mean redefining retirement itself, Putney said. Many will have to put it off or keep working through it, she said.

"For many of us, I don't think it's going to be a condo by a golf course. I'm not sure retirement has ever been that for most people," Putney said.

By USA TODAY's Mark Grandstaff. Read the original article here.