This Mind Trick Boosts Retirement Savings Rates by 31 Percent

daydreaming
Photo by spaxiax / Shutterstock.com

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.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
7 Surprising Ways Retirees Waste Their Savings
7 Surprising Ways Retirees Waste Their Savings

You can make your retirement money last a lot longer by avoiding these costly mistakes

How to Get the Best Possible Deal on Car Insurance
How to Get the Best Possible Deal on Car Insurance

This is the last article on understanding and shopping for car insurance that you’ll ever need.

This Is the Best Time of Day to Take Blood Pressure Meds
This Is the Best Time of Day to Take Blood Pressure Meds

The right timing can help you prevent a big — and possibly fatal — mistake.

My Favorite Amazon Purchases From 22 Years of Shopping There
My Favorite Amazon Purchases From 22 Years of Shopping There

Yes, I’ve been shopping on Amazon since the 1990s. These are among my most beloved buys.

Watch This: Organize Your Home With Dollar Tree Products
Watch This: Organize Your Home With Dollar Tree Products

Here’s how to organize every corner of your home using only items from a dollar store.

View this page without ads

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

Get Started

Most Popular
10 Things Frugal People Never Buy
10 Things Frugal People Never Buy

If you’re a true tightwad, the mere thought of spending money on these items gives you the willies.

10 Useless Purchases You Need to Stop Making
10 Useless Purchases You Need to Stop Making

You might as well flush your money down the loo if you spend it on these things.

The 16 Cars Most Likely to Last 200,000 Miles
The 16 Cars Most Likely to Last 200,000 Miles

One automaker takes half the spots on a list of the longest-lasting vehicles.

7 Social Security Rules Everyone Should Know by Now
7 Social Security Rules Everyone Should Know by Now

Confusion over Social Security is a shame, considering how many of us will need this money badly.

Will Stimulus Checks Increase Your Social Security Taxes?
Will Stimulus Checks Increase Your Social Security Taxes?

Could all those “free” checks prove costly down the road?

9 Shopping Mistakes to Avoid at Costco
9 Shopping Mistakes to Avoid at Costco

Are you missing out on serious savings at your favorite warehouse club?

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

They don’t make coffee makers like this anymore.

11 Products Now in Short Supply Due to the Pandemic
11 Products Now in Short Supply Due to the Pandemic

Many goods we take for granted have become tough to find in 2021.

7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

14 Things You Should Stop Buying in 2021
14 Things You Should Stop Buying in 2021

These convenient household products come with hidden costs that you might not have considered.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

Is Writing a Check Still Safe?
Is Writing a Check Still Safe?

Every time you pay by check, you hand your bank account numbers to a stranger.

6 Ways to Protect Your Retirement Accounts From Hackers
6 Ways to Protect Your Retirement Accounts From Hackers

Imagine having $245,000 stolen from your retirement account — and not being reimbursed.

8 Things You Should Replace to Improve Your Life Today
8 Things You Should Replace to Improve Your Life Today

Being frugal isn’t smart if you put off replacing these items.

This Is the Most Dependable Car Brand in the U.S.
This Is the Most Dependable Car Brand in the U.S.

This brand’s vehicles are least likely to give drivers repair headaches, according to J.D. Power.

13 Amazon Purchases We Are Loving Right Now
13 Amazon Purchases We Are Loving Right Now

These practical products make everyday life a little easier.

9 Deep Discounts Available on Amazon This Friday
9 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

7 Hidden Sections of Amazon Every Shopper Should Know
7 Hidden Sections of Amazon Every Shopper Should Know

These little-known departments of Amazon are gold mines for deal-seekers and impulse shoppers alike.

7 Social Security Benefits You May Be Overlooking
7 Social Security Benefits You May Be Overlooking

There’s more to Social Security than retirement benefits.

View More Articles

View this page without ads

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

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.