Do you really know who you WILL be?

Male hiker exploring the Dolomites landscape

It is human nature not to be very good at imagining our future selves. Scientists call this “temporal discounting” (temporal discounting on Wikipedia).

Various experiments have shown that we either imagine our future selves to be healthier, richer, or more disciplined than we turn out to be, or we feel disconnected from our future selves, thinking about ourselves in the future as if we were thinking about another person.


According to a paper published in Oxford’s Journal of  Social Cognitive and Affective Neuroscience called “Saving for the future self: Neural measures of future self-continuity predict temporal discounting”, “Despite increases in the human life span, people have not increased their rate of saving. In a phenomenon known as ‘temporal discounting’, people value immediate gains over future gains. According to a future self-continuity hypothesis, individuals perceive and treat the future self differently from the present self, and so might fail to save for their future.”

The abstract goes on to say “In addition to supporting the future self-continuity hypothesis, these findings hold implications for significant financial decisions, such as choosing whether to save for the future or spend in the present.” (Bold is my emphasis on what all of this means for each and every one of us).


In a TED Talk, Dan Gilbert explains the psychology of your future self and what he calls “the end of history illusion” described “What I want to convince you today is that all of us are walking around with an illusion, an illusion that history, our personal history, has just come to an end, that we have just recently become the people that we were always meant to be and will be for the rest of our lives.”


He ends his talk “The bottom line is, time is a powerful force. It transforms our preferences. It reshapes our values. It alters our personalities. We seem to appreciate this fact, but only in retrospect. Only when we look backwards do we realize how much change happens in a decade. It’s as if, for most of us, the present is a magic time. It’s a watershed on the timeline. It’s the moment at which we finally become ourselves. Human beings are works in progress that mistakenly think they’re finished. The person you are right now is as transient, as fleeting and as temporary as all the people you’ve ever been. The one constant in our life is change.”


A couple of interesting articles for those who wish to learn more about this phenomenon: one in The Slate titled “Our Puny Human Brains Are Terrible at Thinking About the Future: And that has consequences.” It begins by stating “Our future selves are strangers to us.” Going on to say “You’re less able to resist temptations, you procrastinate more, you exercise less, you put away less money for your retirement, you give up sooner in the face of frustration or temporary pain … “

Another in The Guardian titled “This column will change your life: the end-of-history illusion: Happy just the way you are? We have some bad news for you…” “We labour under what they call the “end-of-history illusion”, imagining that the person we are now is the final version, and that we won’t change much in future.” “It’s easy to see how this might land us in trouble. When you assume your current preferences won’t alter, you’ll make bad decisions …” “The end-of-history phenomenon suggests that we don’t mind confronting this from the refuge of hindsight – change in the past is OK – but we recoil from the thought that we’ll change no less in future. Yet change is all there is.”


What does all this mean?


It means that we are terrible about thinking about what we need to do today about saving for our futures! It means we see our lives and our goals as being the same then as they are today. And because of these misperceptions we have about ourselves, forgetting how much we’ve changed between now and the past, and how much life has changed, and how much our goals have changed between now and the past, that we believe nothing will change between now and the future.

Change is constantly happening.


So how do we plan for these changes?


By forgetting about the details of your everyday spending – because those will change! Both because technology changes and because we ourselves change too. The old, unenlightened method is trying to build your retirement plan from “the bottom up” through accounting for everything you spend today, adding all those expenses up for each month (and by the way, most forget about taxes and non-monthly expenses), and then doing retirement planning to support that budget. Some may call this “goals based” retirement planning because the objective is to plan to be able to fund each of your budget’s goals or expenses; your goal is to do this or be able to do that.


I’ve been a longtime proponent of planning from “the top down,” where the objective is to plan for retirement that prudently sustains your Standard of Individual Living (SOIL). Under this approach, the philosophy recognizes that how you spend your money WILL change over time. Forget about trying to account for everything you spend on today, recognize that in truth and reality, you’re already doing something will all the money you earn today (for those not-yet-retired). You earn it. You pay taxes. You save some for your future selves (hopefully). You spend the rest on living. That’s what money is for!

Everybody spends their money differently – it’s individual – but we all have one common broad goal – to sustain our own standard of living* (and in some cases, improve it if we can – but then it takes more to sustain that, now higher, standard of living). The goal of retirement planning is to forget about how you specifically spend your money – but to sustain your overall SOIL in the first place; the macro, not the micro. What the above research suggests, the micro will change as we change.


The only difference once retired is that you don’t need to save some for your future selves through the act of setting it aside in some account. Rather, once retired, the idea is still to spend money – that’s what it’s still for! However, once retired, you need to know how much you can prudently spend each month/year. When working, your employer metered how much you had to spend. Once retired, you are responsible for metering the spending from retirement accounts (Social Security and pensions still meter how much you can spend each month).


You can share your thoughts today with your future selfwrite yourself an email and schedule it for future delivery. This is one good way to realize and see for yourself what you used to think and make a conscious decision to keep that thought and action, remind yourself you intended to do something and keep doing it, or changing your mind now that you’re “older and wiser!”


*Forget about “the Joneses,” or what others are doing – and focus on what you’re doing.

Photo by Ales Krivec at

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