PERSONAL ACCOUNT

Identify with your future self – it’ll help you save enough for retirement

Writing this column is putting years on me. I just downloaded a smartphone app called AgingBooth, which promised a computer-enhanced glimpse of my older self. The wrinkles are a shock but the good news is I think grey hair is going to suit me. In time, I could even develop a soft spot for the older me.

I better had, of course, because if I don’t care about the older me, no one else is going to pay for the nanotech dentures, robot home help and holidays on Mars he’s going to want in retirement.

But as a rule we don’t have much time for our future selves. We see the older versions of us as strangers we hardly know, and treat them accordingly. It leads us to prefer small rewards now (for me!) over much larger rewards later (for the grey-haired stranger). This emotional disconnect is a big reason why many of us don’t save enough for later life. But you can fix it.

There’s plenty of research to back this up. A 2009 paper called “Don’t stop thinking about tomorrow” (by Hershfield et al) found that those with a greater sense of future self- continuity (people who identified with their older self rather than seeing him or her as a stranger) accumulated greater financial assets over their lifetimes, even after controlling for age and education.

By contrast, a 2008 study by Pronin, Olivola and Kennedy, “Doing Unto Future Selves As You Would Do Unto Others”, found that most people favoured their present self over strangers (as you would expect) – but also treated their future self exactly as they would a stranger.

Intriguingly, this study also suggested an emotional explanation for the bias against our future selves. We feel our own lives directly, from the inside. As a result, we care intensely for the things that will make us feel good now. But we know strangers’ needs only at a distance, from the outside. And imagining the happiness of our future selves is almost as hard.

This was backed up by a 2011 brain-imaging study by Schirmer et al. It found that when people tried to predict how much they would enjoy an event in the future, as opposed to now, most subjects hardly used the brain regions that help us imagine how something will feel subjectively. Which subjects do you think made the most short-sighted financial decisions in a test weeks later? That’s right, the bad savers were those who were worst at imagining their future selves enjoying something.

This isn’t just about the years separating us from our older selves, but also major life changes. A study by Bartels and Rips in 2010 found that people were more reluctant to save now to reward their future selves after major life events, such as a religious conversion.

Again, the effect seems to relate to empathy: the harder it is to imagine our way into a later version of ourself, the less likely we are to sacrifice for our future well-being.

And the message is clear. You can

Virtual reality can help people see what their future lives will really be like