Does your brain recognize the retired you?

"Me first!"
"I've got shotgun!"
"Looking out for number one!"

These catch-phrases reveal two basic aspects of human nature: Our chronic self-absorption and our focus on the immediate. We spend most of our lives living for today with ourselves at the center.

But now science is beginning to reveal how this innate behavior threatens our retirement. Based on functional magnetic resonance imaging (fMRI), researchers know that certain parts of our brain are more active when we're thinking about ourselves. However, a recent Forbes magazine article mentions some preliminary research at the Stanford Center on Longevity with stunning implications for retirement planning. "When people are asked to imagine themselves in retirement, the parts of their brains that usually 'light up' when they think about themselves don't light up at all. It's as if they were thinking about a stranger."

Mother Nature and our brains
My personal theory is that this blind spot about our future selves is a relic from our biological past. Primal humans lived in the perpetual present: "I need meat! My cave is warm! What's that noise? She looks fine!"

During the Stone Age, average life spans didn't extend beyond the child-rearing years, so there was no need to resonate with a future self. Our Neanderthal ancestors focused on food, shelter, danger, and reproduction. Retirement planning wasn't a priority.

Unfortunately, a 2007 survey shows that the same is true for many Baby Boomers. Over 61% have less than $150,000 in savings, and an astonishing 28% have less than $10,000. The Stanford fMRI research gives an intriguing explanation for these stats. People don't routinely give money to strangers, and that's how our brains perceive our elder selves -- as strangers. So why save for retirement?

Easy investing for the Boomers

Boomer Stock Picks	Gain since 1/2/1976	$1000 becomes
Altria Group	35173%	$351,727
ExxonMobil	15408%	$154,085
General Electric	10242%	$102,417
Johnson & Johnson	6877%	$68,773
McDonald's	5856%	$58,564
Procter and Gamble	6518%	$65,179
Average Return	13417%	$134,165
S&P 500 Return	1555%	$15,553
Data from Yahoo! Finance through 12/7/2007

Today we face a bewildering array of investment choices, but the first wave of Boomers had it much easier. Consider the Boomer households in 1976, 30 years after the onset of this demographic explosion. They loved their General Electric appliances and filled their cabinets with products from Procter & Gamble and Johnson & Johnson). They stopped by the Exxon station (today's ExxonMobil on the way to McDonald's. Philip Morris' Marlboro Man (today's Altria Group) was fast becoming an icon for the world's most popular cigarette.

If stock picking was too daunting for our Boomer household, 1976 was the year Vanguard launched its S&P 500 index fund to track the market at large.

Unfortunately, as we now know, too few Boomers were willing to invest money for that distant stranger — the elder self.

Digital imagery to the rescue?
So how can we extend our sense of self beyond the present? The Stanford Center on Longevity has some fascinating clues. Hal Ersner-Hershfield, a graduate-student researcher at the center, is working with communications professor Jeremy Bailenson to devise strategies to help people identify with their older selves. Using computer technology, they can morph an image of you to approximate your appearance in old age. Their experiments with subjects who interacted with their digitally-aged selves have produced dramatic results. Following these interactions, the subjects were given $1,000 to spend or invest. Thus far 30 subjects have been tested. Ersner-Hershfield says that those who saw their aged personas allocated twice as much to retirement in comparison to a control group who interacted with their unaltered selves. Here is a summary of their findings.

On a personal note
My wife and I are eagerly awaiting our first grandchild in the spring. After reading about the Stanford research, I can envision our little descendant one day playing a video game with a Yoda-like self-image as the hero. What a fabulous way to condition the next generation to save for retirement!

In the meantime
Perhaps your brain doesn't light up with visions of your retired self, and Santa won't be bringing a motivational video game starring the elder you. No worries! The Motley Fool Rule Your Retirement service can light the way to your golden years. RYR is a treasure trove of retirement advice, planning tools, and a dozen friendly member-only discussion boards on all aspects of retirement planning. We invite you to take a 30-day free trial.

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