While many Americans hope that they will be able to afford an early retirement, a variety of surveys suggest that people fail to save enough money, which often forces individuals to work much longer than they anticipated.
For instance, according to a poll conducted by The Associated Press and LifeGoesStrong.com, 73 percent of respondents said they plan on working in their retirement years, up from the 67 percent who said the same thing in the spring when a similar survey was conducted. The poll also found that more than half of respondents stated they were not confident about being able to finance their retirement if their present financial condition stayed the same.
However, a new study has found that when consumers actually see what they may look like in their elder years, it increases the dollar amounts they would allocate for retirement purposes.
Respondents allocate more money for retirement after viewing future self
In a series of experiments conducted by a team of researchers—the results of which were published in the American Marketing Association's Journal of Marketing Research—the study's lead analysts created images of the study's participants that portrayed them in an advanced age, showing them what they may look like when they reached retirement. They were then presented with several investment scenarios.
After being presented with these images, the participating adults said they were willing to contribute approximately 33 percent more of their paychecks toward their retirement savings accounts compared to those who were not presented with an image of their future selves.
Hal Hershfield, assistant professor of marketing at New York University's Stern School of Business, said giving individuals a glimpse of what they may look like when they're older raises the concern individuals have with their future financial security.
"One way to increase the feeling of similarity and connection between one's current self and one's future self is by showing people realistic, visual images of their future selves," said Hershfield. "When people are exposed to realistic images of their future selves, they are more willing to act in future-oriented manners, such as taking money that could be spent today and saving it for tomorrow."
Comments