Want to boost your retirement savings? Maybe meeting your future self will motivate you.
Merrill Edge, a division of Bank of America Merrill Lynch, today unveiled an online tool that has just a whiff of science-fiction to it. The tool takes its inspiration from recent research that suggests that younger people who are exposed to visual approximations of what they might look like when they reach retirement age tend to save more. Published in 2011 by academics from institutions including Stanford University, the study showed that subjects who used virtual-reality technology to “see” their future selves were willing to save a median of 6.17% of their pay for retirement, versus a median of 4.41% for those who did not. (For more on the experiment, see this article in The Wall Street Journal, and watch the video below–the face-morphing fun starts at around the 2:50 mark.)
Called Face Retirement, Merrill Edge’s tool uses a webcam, rather than a virtual reality headset, to capture its images. (Currently, customers can’t upload their own photos.) But it should produce the same result, says Alok Prasad, the head of Merrill Edge, a division devoted to the “mass affluent,” or those with investable assets of $50,000 to $250,000.
According to Merrill Edge surveys, retirement is the top concern of this group. Currently, 52% have saved less than $250,000 (which, in turn, is far less than most will need to retire comfortably). And more than half plan to postpone retirement.
The tool, says Prasad, is intended to help members of this group jump start their savings, and become more “fully engaged in saving for retirement… while making it fun.” Those who post pictures of their “older self” on Facebook can solicit advice from friends and family on retirement readiness, says Prasad. “It’s a bit of an ice breaker.”
This post has been updated to clarify the relationship between Merrill Edge and Bank of America Merrill Lynch.