What Can Marshmallows Teach Us About Retirement?

Temptation is everywhere. But if we can just show a little restraint today, we can enjoy even greater rewards in the future. Can we do it? We did a little experiment to find out.
Francesca Gino, Social Scientist, Associate Prof., Harvard Business School

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Our brains are hard-wired to crave instant gratification. When we buy those shoes we want, it triggers our pleasure sensors. But when we decide to save our money, it doesn't--even though we know it's what's best for us. The better we understand these feelings, the more we'll be able to control them and start planning for the things we really need (and no, we don't mean those jeans).

In "The Challenges of Living Longer," Francesca Gino, social scientist and Associate Professor at Harvard Business School, explains that the most critical psychological barrier to preparing for retirement is our inability to plan for the distant, long-term future. Research from both the fields of psychology and economics suggests that people care more about present outcomes than they do about future ones, a tendency called temporal discounting.1Read more

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1. Chapman, G.B. 1996. Temporal discounting and utility for health and money. Journal of Experimental Psychology: Learning, Memory, and Cognition, 22: 771-791.
Lynch, J.G. & G. Zuberman, 2006. When do you want it? Time, decisions, and public policy. Journal of Public Policy Marketing, 25: 67-78.
Choi, J.J., D. Laibson & B.C. Madrian (2011). $100 bills on the sidewalk: suboptimal investment in 401(k) plans. Review of Economics and Statistics, 93: 748-763.

About the author of this Post

Francesca Gino, Social Scientist, Associate Prof., Harvard Business School
Francesca Gino is a social scientist and an associate professor at Harvard Business School. She has earned major research awards from the National Science Foundation and the Academy of Management. Her research has been featured in the New York Times, the New York Times Magazine, the Wall Street Journal, Business Week, the Boston Globe, the Economist, Huffington Post, Newsweek, and Scientific American. Francesca has appeared on CBS Radio and National Public Radio.
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