8 Ways to Motivate Yourself to Save for Retirement

Retirement researchers are examining what causes us to save for the future.

Older couple painting on a canvas outdoors
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Set up automatic contributions. One of the simplest strategies to save more for retirement is to take the decision out of your own hands. About half (47 percent) of 401(k) participants are now in plans offering automatic enrollment, according to Vanguard data. Employees who are automatically enrolled in 401(k) plans had an 82 percent 401(k) participation rate in 2010, compared with the 57 percent of employees who voluntarily signed up for their 401(k) plan. But automatic enrollment is not a guaranteed path to retirement security because the most common default savings rate used by over half of plans is only 3 percent of pay. Workers in plans with automatic enrollment saved an average of 6.3 percent of pay, versus the 7.4 percent saving rate among voluntary 401(k) participants. To attempt to correct this, three-quarters of 401(k) plans with automatic enrollment also automatically increase the contribution rate annually, typically by 1 percent each year. Another 20 percent of plans allow workers to sign up for automatic increases in 401(k) contributions.

Picture yourself in old age. When researchers showed people aged photographs of themselves, it made them more likely to want to save for retirement. "Exposure to those images actually made people feel a bit closer to that self in the future," says Hal Hershfield, an assistant professor in the marketing department at New York University's Stern School of Business. In a 2011 study, after they were shown either an aged or current picture of themselves, the 50 participants were asked to allocate a hypothetical $1,000 among four choices: a retirement fund, checking account, fun and extravagant occasion, or to buy something nice for someone special. Participants who were exposed to the aged photo of themselves allocated more than twice as much money to the retirement account ($172) as those who viewed a rendering of their current appearance ($80). "There are websites that do this age progression thing," says Hershfield. "When you need to make an important financial decision, you can do that and print it out."

Spend time with your grandparents. Strike up a conversation with retired relatives or neighbors. "Spend more time with older role models, people who may act as proxies for your future self like grandparents or older colleagues," says Hershfield. They might provide some insights about what retirement is actually like, which could encourage you to plan for your own future.

Think about your future self. People who feel more connected to their future self may be more likely to save for retirement, according to recent research. Some 193 Stanford University staff members received two different messages about their retirement accounts: one encouraging them to think of their own "long-term well being" and the other telling them to think about a "future self" who is completely dependent on how much they save. A subset of participants who reported feeling closeness to their future, retirement-age selves responded to the "future self" message by saving 0.85 percentage points more of their salary annually. For a 30-year-old man earning $45,485 per year who increases his saving rate from 5 percent to 5.85 percent, this increase is equivalent to an additional $68,797 in savings upon retirement at age 65. "Write a letter to your future self," says Hershfield. "That will at least help you start thinking about your future self as a realistic person who is going to be the recipient of the decisions that you make today with regard to finances."

Twitter: @aiming2retire