What If We Don’t Know Our Future?

Last week, Jared wrote about the future, specifically, the risk that the reality of the future we imagine might disappoint us: “You may fail to reach your goals, no matter how hard you work. Or, perhaps worse, you may reach your goals and find them unfulfilling.” If you haven’t yet read it, I encourage you to.

A lot of the conversations we have with clients revolve around goals. After all, that’s what money and saving and investing are for. Concern with these three things for the sake of themselves is quite empty. It’s when we attach them to goals that they become meaningful.

But, what if it’s hard for us to envision long-term goals? What if you, whether you’re 50, 40, 30, any age, can’t imagine what you want your life to look like when you’re 60? Or 65? Or 70?

Jason Mitchell is a psychologist at Harvard University and he is fascinated by the idea of “Present Bias”: why people make decisions that benefit them in the short-term but are harmful in the long-term. A different term for this: “Impatience Penalty.”

His fascination led him to use neuro-imaging to see how our brains react to two types of personal questions. The first has the respondent think about their present self. The second has them think about their future self. As the respondents answered, Dr. Mitchell and his team were busy mapping their brain activity. As it turns out, when respondents were answering questions about their present self, the ventromedial prefrontal cortex lit up like a Christmas Tree. But, for many, when they were asked questions about their future self, it went dark. The conclusion reached by Mr. Mitchell: people who ignore long-term implications of their decisions tend to think about their future self the same way they think about complete strangers.

Which brings me back to why it can be challenging for some people to think about their long-term financial goals. It’s not that they don’t want to retire or travel the world or have financial freedom, it’s that they don’t see the importance of these things. Simply suggesting someone save more for their future goals won’t work because, for a certain segment of the population, it’s the same as asking them to save money for someone on the other side of the world that they haven’t met and never will. 

Whether your inability to dream up retirement goals is due to brain activity (and I do not mean that in a negative way. We are all wonderful creations) or youth or life being so busy you haven’t had the time to stop and think, it can make it challenging to create a financial plan.

So, what to do in the absence of concrete goals? What can you do to make sure you’re caring for your future self? We have a few suggestions.

First, know your spending. Understanding how much you are spending and what you’re spending it on can provide a good estimate of your needs in retirement. It won’t be exact, especially if you have children, but odds are the bulk of your spending will remain the same. And when we say “know your spending,” we don’t necessarily mean “budget.” We simply mean: Know where your money is going.

Second, lean on personal finance guidelines: save 10%-25% of your income, depending on your salary and how much wealth you’ve accumulated. (I wrote a “How Much Should You Save…” brief about this very thing nearly two years go.) Protect your spouse and family with at least 10x your earnings in term life insurance and adequate disability insurance. Keep 3-6 months of living expenses in an emergency fund. Guidelines aren’t perfect, but they’re better than taking no action at all.

Third, pay attention to the experiences that bring you joy. Travel is one many of us share. Food is another one. Emily and I often joke that most of our retirement will be spent eating. This exercise can help you understand which line items you may want to increase in your plan.

The most important thing, however, is to not let your inability to envision your future get in the way of planning. Whether your ventromedial prefrontal cortex resembles a bonfire or a black hole when you think of your future self, you’ll be well served working with a real financial planner. 

You can schedule time to chat with one by clicking here.




Ryan Smith
[email protected]

Born and raised on the North Shore of Massachusetts, I moved to Raleigh in 2011 to marry my wife, Emily. We have two kids, Jack and Gwen, a golden retriever named Olly, and are members of Church of the Apostles. I have been a Financial Advisor since 2005 and earned a Master’s of Science in Financial Planning from Bentley University in 2007. I became a CFP® professional in 2009, a Retirement Income Certified Professional® in 2015, and a Certified Tax Specialist™ in 2023.