How Viewing a "Virtual You" Can Help You Save

Hugh Pickens writes "The WSJ reports that computer scientists, economists, neuroscientists and psychologists are teaming up to find innovative ways of turning impulsive spenders into patient savers. One way to shock Americans into saving more for their retirement is software that lets users stare into a camera in a virtual-reality laboratory and see an image staring back of how they will look in the year 2057. By enabling the young to see themselves as they will be when they are old, virtual-reality technology can transform their urge to spend for today into a willingness to save for tomorrow because to the extent that people can more vividly imagine how badly they will feel in the future with little to no retirement savings, they can be motivated to save more money now. In one test experimental subjects who saw a persuasive visual analog of a 70-year old version of themselves by morphing the shape and texture of his avatar to simulate the aging process reported they would save twice as much as those who didn't (PDF). 'An employee's ID photo could be age-morphed and placed on the benefits section of the company's website,' says Dan Goldstein of London Business School. 'From there, we're just a few clicks and a few minutes away from someone making a lasting decision that can be worth thousands [of dollars].'"

Comments

This explains it all.

[giampy]

http://youtu.be/A3oIiH7BLmg

Ah, yes, the US retirement scams

[guruevi]

Get $100 taken out of your paycheck every month for 40 or 50 years (480 months * 100 = $48,000) and then get a meager 600/month back for maybe 10 (120 months = however much $72,000 will be worth within 40 years) and if you're healthy enough 15 years.

My employer pays for my pension plan and they put in $100 and the $600 is what the fund says I will get even though my investments are very aggressive at this point (50% goes in the tech and asian markets with very good dividends that double the investment every quarter, 50% in the safe 'recommended' aggregated funds which doesn't ever seem to make a profit but is promised to be always there even if the markets crash). If I make another $250 contribution every month they say I should be able to have the same income as I do now but measured against the historic devaluation of money that is not what I want to be making within 40 years and I really could use the 250 right now.

The only way the pension funds work is if you're in the middle-to-upper class (>$250,000/year income) and can contribute easily a good $1000/month into your own managed investment funds. Then you should be able to cash in when you're 60 and live comfortably if off course you're investments paid off over time and you're not committing large funds in bubble's and crashes.

Re:Why on earth would I save?

[MarcQuadra]

The idea that you and I will have equal votes in forty years, when my life of scrimping and saving means I have $1M in the bank, and you're penniless and living on debt scares the bejeezus out of me.