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Save Today, Not Tomorrow

It has never been more important to start saving for your retirement than it is now. It was only 20 years ago that Pension Plans were the most prevalent company sponsored retirement plan.

Pension Plan: Retirement plan where your employer makes contributions into a fund set aside for your future benefit. When you retire, you receive a monthly income stream for life.

However, now, it is very rare to find this benefit in the private sector. What’s even more troubling is that this decline in pensions is taking place in an environment where Social Security is underfunded. This means it may be up to you to fill this gap and create your own retirement security!  

Academics have been studying ways to motivate people to save more now. However, they are finding that when faced with the decision to satisfy our immediate needs or our future needs that our present needs usually win.

Here are a few strategies they suggest will motivate you to save more now:

  1. Get a Financial Plan
  2. Envision your Future
  3. Breakdown Long-Term Goals into Short-Term Goals
  4. Keep Tabs on Your Progress
  5. Automate Your Savings

I recently watched a Ted Talk by Shlomo Benartzi, an economist and professor at UCLA and co-chair of the Behavioral Decision-Making Group at UCLA's Anderson School of Management, who gave a great presentation on this topic. Check it out below:

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