We suck at saving for retirement. The average 50 year old has $43,797 saved for retirement. I hate to break it, but that is just not going to cut it. With the fact that most of us have such a hard time saving for retirement, we need to come up with a way to make it more fun or enjoyable so that people start actually saving.
Let’s look into the mind of a typical person. They say to themselves, “I should probably start saving for retirement.” The a commercial comes on TV for the new iPhone and drooling ensues. By the time the commercial is over, they say to themselves, “what was I going to do again? Oh well, that new iPhone looks sweet!”
I’m not trying to pick on people, but we have a short attention span. That and companies spend millions every year to better understand how we think and react. They then use this against us so we fulfill a short-term need instead of a long-term need.
If the above example doesn’t describe you, then maybe this one does:
When you think of saving for retirement, you say, why should I save a bunch of money when I might not even be around to enjoy. YOLO people. YOLO.
In either of the examples I presented there is one thing true about both of them: we are not good at conceptualizing the long-term. So, in order to save for retirement, we need to re-wire our brains. Don’t worry, it won’t hurt.
The Trick To Get You To Save For Retirement
To re-wire our brain, we have to link retirement with something. So take out a pen and paper (or open your note app on your smartphone) and start thinking about and writing down what you want out of retirement. Here are some ideas to get you started:
- Play golf every week
- Have a beach house
- Drink pina coladas on the beach all day long
- Spoil your grand kids
- Pay for you, your kids and grand kids to go away on an amazing vacation every year
- Buy an NBA franchise
Just think what you really want to do. What are your dreams and desires?
Once you have them written down, you need to figure out a way to remember them. Here are a few ideas for that:
- Set up a reminder every week in your smartphone
- Put a note with them in your wallet so you see it when you buy something
- Send yourself an email using Future Me
- Set up a recurring reminder in your email
The key is to keep your dreams and desires in the front of your mind.
How does this work? It gets us thinking about retirement in a different way. Instead of thinking about saving money for a day we might never be around to see or looking at retirement as giving up on having fun today (both negative thinking), we see goals and something that will make us happy when we are able to afford it. This puts retirement in a positive light. It becomes something we look forward to reaching and attaining.
But you have to keep the dreams in front of your mind, in front of your face. The more often you see them and are reminded of them, the more likely you will make smarter choices about spending and the more likely you will be to fund an IRA or increase the amount you are saving for retirement.
That’s it. Take 10 minutes to figure out your dreams and another 5 minutes to set up a system so you are constantly reminded of them. Then you can go back to doing whatever it is you do for fun and relaxation. Can you sacrifice 15 minutes of your life in order to reach your dreams for retirement?
For tips on how to save as much as possible for retirement, check out my post on early retirement. There’s good information in there even if you aren’t looking to retire early.
[Photo Credit: Ewen Roberts]