How much money do you put away each month toward retirement? Maybe you sock away all you can, already dreaming of that Florida condo. Or maybe you can’t even imagine where you’ll be then, what you’ll want to use the money for, even what you’ll be like: when you think about yourself far in the future, it’s almost like thinking about someone else. A growing body of work suggests that the more you feel your future self is really you, the more you’ll put in his or her—whoops, your—bank account.

When making decisions, we often treat our future self the way we would treat another person, found a study in 2008 by Princeton psychologist Emily Pronin. People in the study often shied away from doing something helpful but unpleasant when they had to do it right at that moment. But when their help was needed a few months or a year down the line, they were more likely to sign up—just as likely as they were to suggest that someone else should help out.

Exactly how distant we feel from our future self varies from person to person, according to a 2008 study by psychologists Hal Ersner-Hershfield and Brian Knutson, then both at Stanford University. The researchers asked people to think about themselves now and in the future while scanning their brain with functional MRI. Previous studies showed that an area of the brain called the rostral anterior cingulate cortex is activated more when you think about yourself than when you think about another person; this study showed that it is also more active when you think about yourself now as compared with imagining yourself 10 years from now. Some people showed a smaller difference in activity, suggesting they saw their future self more as “me” than as “someone else.”

Each participant in the study then had to pick between getting some amount of money immediately or receiving a larger sum in a certain number of days. The subjects varied in how much extra cash they required to make the reward worth the wait. That variation, the study found, matched the brain scans. The people who showed a smaller difference in brain activity when thinking about their current and future self needed less money to make the wait worthwhile.

These individual differences affect financial decisions outside the lab, too. In their next study, published last year, Ersner-Hershfield and Knutson found that people who saw their current and future self as more alike had real-world financial assets that were worth more—even when the researchers accounted for factors such as age and education. As Knutson put it, “the more similar you report feeling to your future self, the more savings you report having in your bank account.”

Because those who feel identified with their future self make financial decisions with long-term benefits, Ersner-Hershfield says, encouraging people to imagine themselves in the future might help them save more. “Even thinking, ‘if I were to call my future self right now, what would [he or she] think?’ might affect the decisions you make in the present,” he says.

This article was originally published with the title When I'm 64.

6 Comments

1. 1. bradley002 09:44 AM 7/7/10

   I question the necessity of validating such a common-sense notion with a formal study.

   Reply | Report Abuse | Link to this

2. 2. scientific earthling 10:02 PM 7/7/10

   I have followed the mantra and put aside what I could every day since I first started working. It has all ended up in multiple "Superannuation accounts", which I will be able to access after 65 (stupid me-when the agent asked my what age will you retire, then prompted me "most people chose 65" - I agreed, he got a bigger commission for that) .
   
   Just did an analysis of one such account started in 1984. Taking every dollar deposited each year and adjusting for inflation (the Auz govt. has a web site which tells you today's value of any amount at any date -makes the job easy) Add up all the inflation adjusted amounts and look at today's value of the fund, guess what I am loosing money.
   
   So much for retirement savings in government approved institutions.

   Reply | Report Abuse | Link to this

3. 3. sparcboy 08:43 AM 7/8/10

   This is good, so long as you factor in major market downturns wiping out over 40% or more of your life savings. And don't forget divorce. My now ex decided she wasn't "happy" and that cut my entire assets by more than half.
   
   Amazing how easily all of one's hard work and sacrifices saving for the future can be lost in no time at all.

   Reply | Report Abuse | Link to this

4. 4. Tenn Slim 10:40 AM 7/19/10

   Opine
   Being one of the 65 Plus oldsters, My opine, is that if one starts thinking about ones future, in increments, IE Plus 5, Plus 10, Plus 15, it is easier to conceptualize, to do fiscal matirices, and essentially to grasp the nuances of Financial Probabilities.
   It is the "fear" of the unknowable, that keeps one in the present.
   end
   Semper Fi
   We WILL Prevail

   Reply | Report Abuse | Link to this

5. 5. Tenn Slim 10:44 AM 7/19/10

   Opine
   Sci Am articles always generate intense interest, Been a while since I visited.
   Future "looks" require a level of hutzpah. Most folks deal with dailies, and seldom get out into thier future. It becomes far to "hazy", particularly in the Fiscal Futures. We live in far too complex a society to adequately deal with our Fiscal Futures much farther out than next Friday's Pay Check.
   end
   Semper Fi
   

   Reply | Report Abuse | Link to this

6. 6. Tenn Slim in reply to bradley002 10:46 AM 7/19/10

   Opine
   AGREE, however, we must consider the R and Der has to live also.
   Many NGOs exist on just such trivia.
   end
   Semper FI
   

   Reply | Report Abuse | Link to this