Saving and investments will help prepare you for retirement. This should be a no-brainer, but more than half of Americans have no investments when it comes time to retire. What gives?
Clearly, there’s a disconnect between the smart thing to do and what actually gets done. Researchers at Prudential think that the problem lies in the way human brains function. By revealing these inner quirks, they think they’ll be able to convince people to actually start saving for retirement in a meaningful way. Check out their thoughts and be the judge for yourself.
One of their chief findings is that people have a hard time working for their future selves. People have brain responses that are nearly identical when thinking about a stranger and when thinking about their older selves. That’s a big reason why people don’t save for this future self. They can’t relate to this person, imagine their needs, or even know if they like this person or not – even though it’s them!
Other innate brain behaviors are equally important. Procrastination is built into the human mental mechanism. Putting money aside for the distant future is uncomfortable to the brain – almost as much as physical pain. It’s hard for people to avoid the temptation of satisfaction spending. Lastly, too many choices (as is often the case when considering investment options for retirement) cause people to freeze and not act at all.
Overcoming these brain foibles is integral in saving for retirement. It’s how Prudential helps their customers to gain healthy habits that will promote financial progress over the decades, and make retirement secure and happy. Check out their videos to learn more about how your brain can hurt or help your future retirement goals.