Everyone knows that living expenses will probably double in the next 10 years. Then why don’t people close to retirement save enough?
The knowledge that the earth is in danger of being inhospitable for our future generations is fairly well known. But very few of us are willing to adopt an eco-friendly lifestyle. Why?
In real life, we do all that is possible to take care of our present-day needs. When we are hungry, we have food; we work for an income to take care of our daily needs. We build families and friends to take care of our psychological needs.
While we do many things to take care of our present-day needs, why is it so hard to put ourselves in our own shoes five or 10 years down the line and plan accordingly?
We are willing to sacrifice a lot to take care of our children, parents and friends. The one person whose plight we are not bothered about is our own selves in the future—our future selves.
Is the inability to honour the duties and responsibilities towards one’s future self hardwired in our brains?
Hal Hershfield, a social psychologist at UCLA Anderson, tends to agree with this assumption. According to his study, when people think of themselves in the future, it feels to them like they are seeing a different person entirely—like a stranger on the street. Jason Mitchell at Harvard has found that when we picture ourselves experiencing something pleasurable a year from now, many of us use the brain areas involved in imagining a stranger.
These studies establish the biological truth that one’s future self is a stranger within each of us. The present self has only as much of a relationship with the future self as we have with a stranger on the road.
This lack of relationship between our present self and our future self is at the core of many of the behaviour problems in our society—from not saving enough for our retirement, to why we continue to indulge in unhealthy behaviours putting us at risk of diseases in the future, to why we don’t alter our present-day-actions to preserve the earth for our future generations.
For the most part of human existence, humans lived for the moment. It is only with the advent of agriculture (about 8,000-12,000 years ago) that humans started thinking of living for the next day. In our evolutionary history, the existence of our future selves is of very recent origin. So while taking a decision, the evolutionary pull to live for today is much more than that of living for the sake of our future selves.
The difficulty is even greater if we expect the present self to sacrifice anything to benefit the future self.
Critical to solving many of the problems in society are the strategies to make our present self be cognizant of and considerate of our future self, i.e., the present self building a strong emotional bond with our future self.
Empathy is at the core of building an emotional bond with another person. Empathy is generated best in face-to-face transactions. The feeling of empathy between two persons diminishes as the physical and temporal distance between them increases.
How do we get our present selves to build empathy with a self that is 20 or 30 years ahead in future? This is a huge challenge.
Hershfield found that people who spend a few minutes getting acquainted with a computer-generated simulation of what they might look like in the future were motivated to make better decisions about retirement planning.
This age progression technique has been used successfully by financial institutions like Merrill Edge and Prudential to influence investment decisions. It is quite appropriate that industries whose existence is dependent on unravelling this conundrum—such as the insurance and investment industries—are the ones leading the thinking on this.
Oleg Urminsky of The University of Chicago Booth School of Business believes that people have a positivity bias about future. According to Oleg, people know that in the past they have changed for both, the better and the worse, and in the future they expect to change as well. But in the future, they think the changes will be primarily improvements. This “I am only going to be better in future” belief negates any responsibility the present self has towards taking care of the future self.
How do we break this streak of indelible optimism about the future and bring about a more realistic expectation about our future self?
The hand of a parent will react automatically to protect their daughter’s head from hitting the table edge. The crucial question is—what are the temporal limits of this parental care? Can she visualize her daughter’s marriage 20 years down the line or is her brain capable of thinking only up to college expenses 10 years down the line? A lot more work needs to be done to understand the temporal limits of a person and the factors that moderate it.
Knowledge that the present self and the future self of a person are two distinct identities with very little relationship with each other has significant consequences. How one thinks about one’s future self will influence one’s decisions and behaviours in the present.
Policymakers will have to focus on building new strategies to make sure that, like a Good Samaritan, the present self takes a bit more care of the future self, the stranger on the road. Therein lies the path in helping to create healthier people, better investors and more responsible citizens across the world.
Biju Dominic is the chief executive officer of Final Mile Consulting, a behaviour architecture firm.