Life is a carousel of decisions, and often, we make choices that prioritize the immediate gratification of the present over the uncertain, far away future. It’s especially challenging when that future includes something as distant and intangible as retirement.

How do we prepare for a phase of life that feels so disconnected from our current reality?

The disconnect between now and later

Last year as we were building Savvly's first product for accredited investors, we conducted user research with hundreds of people. We found that virtually everyone — no matter their age — viewed the future version of themselves as a stranger.

Consider this quote from one of our respondents:

"Outliving my savings... I guess that would be a nice problem to have. But it's hard to even fathom... I'm 64 and don't feel that old."

While we believe in the power of feeling young at heart, it can also prevent us from taking care of our future selves. Running out of money was not a top-of-mind issue for the respondent above, but it's an unfortunate reality for many. 2 in 3 Americans run out of money in retirement, no matter their income or net worth.

A deeper dive into the concept

Renowned Social Psychologist Hal Ersner-Hershfield is recognized for his groundbreaking research in this field. In a study aimed at exploring the emotional connection individuals have with their future selves, he analyzed how this link correlated with their savings habits.

He used the Venn diagrams shown below: one labeled “current self” and the other labeled “future self”. Starting with a pair that had no overlap, each pair gradually increased the degree of overlap until the final pair was nearly completely overlapping. Participants were then asked to select the pair of circles that best represented the connection they felt with their future selves.

Those who selected the circles with greater overlap were more likely to have higher savings compared to those who did not feel tightly connected with their present and future selves.

With the flaws of the current retirement system and Social Security on unsteady footing — further compounded by increasing life expectancies — it's never been more important to shift your mindset and take care of the future you. So, how can you get more connected to your future self?

How to align with your future self

1. Face aging tech: If you're curious about what you might look like many years from now, try using apps like AgingBooth or Oldify. Seeing a future version of yourself can be fun (and potentially a little scary). But it might inspire you to increase your savings and take care of the person you will become.

2. Treat yourself like a loved one: If thinking of your future self feels abstract, imagine them as someone you deeply care about — a child, a partner, a family member. This shift in perspective can make you feel more responsible toward your future wellbeing.

3. Create a vision board: Envision your ideal future with a vision board. Include where you’ll live, your hobbies, and who you’ll be with. This can turn the abstract into something tangible and motivating.

4. Write to yourself: Write a letter to your future self detailing all you've achieved. This exercise can build a personal connection and make your future needs feel more immediate. If writing letters isn't your style, try journaling about your life five, ten, or twenty years from now. What does your life look like, and how are your actions today shaping that future?

Remember, it's never too late

While the thought of retirement may seem distant, beginning to save and invest now can make a big impact on your comfort and happiness later. The journey toward financial security is deeply rooted in the vision we hold for our future selves.

At Savvly, we get how hard it is to save for retirement when it feels so distant. That's why we are building the first market-driven pension to help make the process so much simpler. The Savvly Smart Pension is an alternative investment designed to give you easy and affordable financial security for life – at a fraction of the cost of an annuity or traditional index fund. It’s a new solution that can offer long-term income when you need it most.

The best part? Compared to investing in the markets on your own, you can achieve the same financial outcomes with 2-3x less of an investment contribution. This is made possible by partially giving up some investment liquidity.

The bottom line

Recognizing the gap between our current and future selves is important as you think about saving for retirement. By closing that divide and implementing some of the strategies mentioned above, you can strengthen your bond with the person you'll become and set yourself up for a better future. This will help transform retirement saving from a burden into an important part of your present journey.

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