This Mind Trick Boosts Retirement Savings Rates by 31 Percent

This Mind Trick Boosts Retirement Savings Rates by 31 Percent
Photo by spaxiax /

Boosting your retirement savings could be as simple as closing your eyes and imagining your golden years.

Folks who picture their retirement say they should sock away 31 percent more money compared with people who do not think about what their retirement will be like, according to a recent survey from investment management firm Capital Group.

About 1,200 American adults with a 401(k), individual retirement account or other savings were polled for the survey.

Half of the participants received a version of the survey that included the question, “What percent of income should people save from their paycheck in their retirement savings account?”

The other half received a different version of the survey. Before it posed that question, it prompted participants to imagine what they want their lives to be like in their 60s, 70s and beyond.

Specifically, this version of the survey asked respondents 15 questions about:

  • Activities they expect to pursue in their 60s, 70s, 80s and beyond
  • How retirement will be different for them than it was for older generations
  • Their investment objectives
  • Aging population trends

The participants who were simply asked for a retirement savings rate said people should save 16.2 percent of their paycheck in a retirement account, on average. The participants who were first prompted to think about their own retirement, however, said 21.2 percent, on average.

That’s an increase of about 31 percent for the folks who envisioned their retirement.

Among women, the increase was more pronounced. Women who were not prompted to envision their retirement said people should save 15.9 percent of their paycheck, while women who did imagine life in retirement said 22.5 percent. That’s increase of about 42 percent for women picturing their retirement.

Heather Lord, senior vice president and head of strategy and innovation at Capital Group, notes:

“The financial services industry sometimes accentuates worries and guilt to get people to pay more attention to planning and saving for retirement. Fear doesn’t generally work. We believe — and our survey shows — that imagining one’s later years is a powerful exercise that helps drive increased average savings per paycheck for retirement.”

What’s your take on this news? Share your thoughts below or over on our Facebook page.

Learn everything you need to plan your dream retirement

The Only Retirement Guide You'll Ever Need gives you the knowledge you need to retire on your own terms. Sure, you can pay a financial adviser, but this online course gives you total control to create a custom retirement plan around the things that make you happy.

You're going to get expert, personalized advice. You'll have access to the latest tools. And when it's complete, you'll be able to approach your retirement confidently and with peace of mind.

It's time to plan the best years of your life. Let's get started.

Read Next

9 Great Amazon Finds You Can Buy for Less Than $5
9 Great Amazon Finds You Can Buy for Less Than $5

These products offer big value at a small price.

How to Avoid Being Surprised by 7 Nasty Expenses
How to Avoid Being Surprised by 7 Nasty Expenses

Major expenses are difficult to predict, but there are ways to make sure you’re protected.

10 Purchases You Should Not Put on a Credit Card
10 Purchases You Should Not Put on a Credit Card

Credit cards offer many conveniences and protections, but sometimes it’s simply smarter to keep the plastic tucked away.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started