The Human Nature Behind Retirement Savings Procrastination

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13855879173_ef08eb8836Everybody knows that we should be saving for retirement, right? Sure, but that’s the same kind of “know” that we mean when we say, “I know I should exercise”, “I know I should floss”, “I know I should mow the lawn.”. “Know” isn’t an action verb. It’s why people who know about retirement usually aren’t saving for it, or aren’t saving enough.
In the Prudential Masterbrand 2015 ad campaign, Prudential reminds us of several reasons why we don’t do what we know is necessary, regarding retirement. They offer 3 simple insights, each based on human nature when faced with boring, tedious, or tantalizing tasks.

  • Overwhelming variety. In one example, individuals are presented with a huge bag of different stuffed animals, and told to organize them. No other instruction is given. Books on organization are strewn about the room, and coffee is provided. Most of the people simply don’t know where to start, and they’re further befuddled when more animals are brought in. Like this example, people are less likely to invest in 401(k)s and the like when there are too many fund options and little clear direction provided.
  • Tedium. Two groups of people are given a list of tedious problems. One group is allowed to take a break and browse the internet or play with puppies. These perform better on the task than the group that had to plow straight through. When approaching retirement plans, give yourself time and ample breaks to make the decision making process easier.
  • Temptation. Little kids are left alone in a room with a marshmallow, told that if they don’t eat it they’ll be given a second. Some eat it, some don’t and are rewarded. In retirement saving, it’s easy to spend the money on something else before you save. But if you save, you’ll be able to buy lots of marshmallows one day.

Whimsical illustrations make retirement saving easier to think about and begin. Most of us need a little more time and effort for both.

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