Hello from Future You

What if you could peer into the mirror and see your future self peering back? It’s you, but you have wrinkles, bags under your eyes, gray hair. How startling would it be? More important, how would this sight change you?

This isn’t speculative fiction. It’s something a team of researchers cooked up as a way to help young people make better decisions about saving for retirement. They took photos of college-age subjects and digitally transformed half of them into future-self avatars at age 65. 

Subjects then donned virtual reality goggles and looked at a mirror that showed either their current or future self. They were given $1,000 to spend, which they could use in a variety of ways, including investing in a retirement fund.

The result? Those who met their older avatars saved more than twice as much for retirement than those who saw their current selves. 

Americans are living longer than ever, but we have the lowest savings rate of any first-world country. 

Moreover, employer-based retirement plans aren’t nearly as robust as they used to be. The result is that we all have a great need to save for retirement. Unfortunately, even though most of us know this, we’re just not very good at it. 

At least part of the reason is that when you’re young, it’s hard to imagine being old. Future You is too abstract to demand sacrifices from Today You. Maybe an intense VR experience with Future You is just the trick.

Failing that, here are a few other strategies you can use to save more.

Make it automatic.  

Don’t even think about saving. Thinking is how we get ourselves in trouble. I think I could use a new record. I think I’ll go out to lunch. I think we need new kitchen tile. Instead, set up an automatic transfer to your savings or retirement account on payday. That way, you won’t be tempted to spend the money elsewhere. 

Stash your raise. 

When you get a pay increase, make an equal increase in your payday savings deposit or at least dedicate half of the increase to savings. 

You’re not likely to miss the money since you’ve ostensibly already trained yourself to live on your previous salary.

You can do the same thing with one-time chunks of money you receive, say from a tax refund, an end-of-year bonus — even that twenty you found in your winter jacket the first time you pulled it out in November. Stick it in retirement and forget about it.

Use a change jar. 

Just like when you were a kid and saved your coins for a toy or skateboard, start a jar for savings. Each night, drop whatever coins you have inside.

Once a week or so, you might even slip a couple loose bills from your wallet through the slit. When it’s full, take it to the bank, have it counted and — you guessed it — deposit it in your savings account. 

This tactic can add up to a few hundred dollars over the course of a year, and just like that automatic deposit, you won’t even notice the money you’re not spending.

Spend less.

OK, maybe this isn’t really a trick. But if you make a budget so you see exactly where your money is going, you may be able to identify a few spots to reduce spending.

Most important: Start now.

Whatever tricks you use for saving, the key is to get on with it soon. Like now. Future You will thank you. 

Imagine that gray old guy or gal smiling with appreciation.