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Back to the Future: Convincing People to Save

By Hal E. Hershfield, Assistant Professor of Marketing

Hal Hershfield's research on using age-progressed images to increase retirement

When people are exposed to realistic images of their future selves, they are more willing to act in future-oriented manners.

More than half of Americans fail to put away enough money to maintain their lifestyles during retirement. Show them an image of how they’ll look at retirement age, however, and they can’t save fast enough, according to new research by Hal E. Hershfield, assistant professor of marketing at NYU Stern.

Retirement can feel so far off to people that they can’t imagine it will happen to them, and thus they save less than they will really need.

But putting an actual face on retirement serves as a reality check, according to “Increasing Saving Behavior Through Age-Progressed Renderings of the Future Self,” co-authored by Hershfield and colleagues from Yahoo Research, Stanford, and Ohio State and published in the American Marketing Association’s Journal of Marketing Research. The findings may make it easier for marketers of retirement plans and financial services to convince their clients to save more for their retirements.

The authors created age-progressed images of the research participants and then asked them to participate in investment scenarios.

Faced with the manipulated images, working-age adults were willing to allocate approximately 33 percent more of their paychecks to their retirement accounts than the control group. In another online virtual reality experiment, participants who saw their age-progressed photos were willing to put away about twice as much in a long-term savings account than those who did not.

“One way to increase the feeling of similarity and connection between one's current self and one's future self is by showing people realistic, visual images of their future selves,” says Hershfield. “When people are exposed to realistic images of their future selves, they are more willing to act in future-oriented manners."