But I want that doughnut now!

I still get a chuckle out of Duke Professor Dan Ariely's work in behavioral economics. In one study, he looked at people getting ready to attend a conference in two weeks. Some of the attendees made it a goal to eat healthy at the conference. But when the conference starts, those same attendees find themselves munching (happily!) on the proffered doughnuts versus the healthier apples and bananas.

Dan was curious why this was so. What transpired to sway attendees from healthy eating goals to their actual behavior of doughnut consumption? Dan's conclusion was that folks were succumbing to immediacy. Formally defined, immediacy is the bringing of a person into direct and instant involvement with something, giving rise to a sense of urgency, or in the case of the doughnuts, excitement. Put another way, healthy eating goals go out the window when the attendees were "confronted" by the real temptation of doughnuts.

I can certainly attest to this challenge. A 401k conference last year presented the same conundrum. The conference staff brought out platters of Voodoo doughnuts during one afternoon break. It took quite a bit of willpower on my part to resist the colorful temptations and instead stick with fruit and protein bars. My decision was made easier by my desire not to have my waistline expand.

I was ruminating on this doughnut experience as I thought about the oft-quoted idea that Americans spend more time planning vacation each year than they do planning for retirement. This rumination was compounded by a conversation today with a 45-year-old employee. She realized that retirement is a lot closer than she had thought. In her words, "the train is in the tunnel and approaching faster than I thought". She wanted to go back 20 years in time to encourage her 25-year-old self to save. I believe time travel might only exist in a Harry Potter world!

It makes sense that more time is spent vacation planning for the current year because vacation is immediate. If you want to go on vacation soon, you need to plan for it. One of my friends even plans vacation six months in advance. Vacation is immediate and it is fun. Retirement on the other hand is "way in the future" and may not be all that fun to think about. Small wonder that vacation planning gets more time and attention.

So what is an answer then? How do we get retirement to have the same immediacy of vacation planing or the excitement and temptation of a platter of doughnuts? As I alluded to in my last article, gamification seems to be the answer. It would also require a fair amount of effort to keep the game fresh and top of mind.

I am not sure that traditional answers - video trainings, one on one meetings, group education talks - are as effective. Certainly the "auto" tools of auto-enrollment, auto-escalation, etc. can help. And yes, these tools need to be paired with a living wage. It is hard to squeeze blood from the proverbial stone if you are struggling to make ends meet.

But how does retirement plan industry really get employees fired up to save so that they can retire with dignity? Perhaps that is the million-dollar question? It is worth exploring.