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Despite the increase in human life span and the major shift in investment responsibility from employer to employee, Americans are not saving enough for retirement. Empirical research in behavioral economics has illuminated fundamental flaws in mainstream economic theory, the basis for savings policies. Saving for the future involves a choice between having benefits now or in the future. The future self-continuity hypothesis suggests that people view their present and future selves differently, which affects their tendency to save. This thesis uses a survey to investigate the malleability of connection to one’s future self and measures discounting of the future through a delayed discounting paradigm (Hershfield, Wimmer & Knutson, 2008 and Kirby & Marakovic, 1996). The future self-continuity hypothesis was confirmed in addition to significant differences between participants with and without savings/retirement accounts and their respective rankings on the future self-continuity scales, and on the number of delayed versus immediate rewards chosen. Individual differences in connection and care about one’s future self has serious pragmatic consequences for those individuals’ financial well being and for adequate retirement savings in the U.S.
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Gillan, Georgia Rosa, "Inadequate Retirement Savings in the United States: Failure to Imagine Your Future Self" (2015). Senior Projects Spring 2015. 297.