The relationship we forge with our future selves can greatly impact financial decision making in the present. Research conducted by social psychologist Hal Hershfield using functional magnetic resonance imaging revealed that subjects with a stronger connection to their future selves were more likely to delay gratification and make more prudent financial choices. But how can plan sponsors help employees make the connection? The Consumer Financial Protection Bureau has a “Future Self Tool” with three self-guided exercises.
- Letter from Your Future Self. A letter is written from the present self to the future self (in 10 years), addressing aspirations, achievements, any potential regrets and words of advice. This personal exploration of where participants see themselves a decade down the line offers a platform to express their deeply held hopes and dreams — and helps foster greater emotional connection to their future self.
- Picture Your Future Self. Participants are asked to vividly imagine and visually represent in pictures or symbols both their current and desired future self (e.g., home, activities and accomplishments) to more clearly appreciate the long-term consequences of present-day financial decisions. This visualization serves as a potent reminder of why it’s important to make forward-looking financial choices today, given their potential lifestyle impacts tomorrow. By painting a clear and vivid image of a desired future, participants will presumably be better motivated to do what’s necessary to achieve it.
- Conversation with Future Self. This exercise involves role-playing a discussion between the present and future self, prompting an open and honest dialogue about hopes, fears, expectations and plans on the horizon. By doing so, participants address current concerns and hear advice from a trusted source — themselves. The process can offer clarity regarding the path they should take to secure their future happiness and financial well-being.
In the end, our collective challenge is to help ensure that the needs of employees’ future selves are recognized and acted upon in their current retirement planning strategies and decision making. Giving participants tools and resources to bridge this gap can help them avoid “future shock” and assert greater agency over their financial well-being in the here and now.