Delayed Gratification
/Do you recall the Stanford marshmallow experiment on delayed gratification? They would ask a child to sit at a table and wait to eat the marshmallow that sat in front of them. If they waited, they were promised a reward of extra marshmallows. The experimenter would leave the room for 15 minutes and the video camera would capture the agony the child experienced trying not to eat the marshmallow.
If 15 minutes is hard to wait for a 5-year old, you can only imagine what 30 years looks like to a young adult waiting for retirement. We say the average person needs to save 10-20% for 30 to 40 years to have a comfortable retirement. That’s easy enough to remember 10, 20, 30, 40, but much more difficult to do.
There are so many tempting distractions that get in the way of saving for retirement: the new car, the fabulous vacation, eating out, etc. Each of us needs to decide for ourselves where to make the cuts so our retirement plan doesn’t suffer.
The follow-up studies found that children who were able to wait longer for the rewards tended to have better life outcomes, as measured by SAT scores, educational attainment, body mass index, and other life measures. I’ll bet they also had a better retirement.
