Most of us know we should be saving for retirement.
We’ve heard the advice: start early, let compounding interest work for you and think of your future self.
And yet, saving for retirement often feels surprisingly difficult, especially when retirement is decades away.
Why our Brains Struggle with Retirement Saving
Behavioural research helps explain why. When we think about our future selves, our brains often treat ‘future me’ almost like a stranger. That disconnect plays a big role in how we spend, save and invest.
There are two key behavioural challenges that affect retirement savings.
We’re bad at thinking in totals
Ask someone what they spent on coffee yesterday and they can usually tell you. Ask what they spent on coffee over the last three months and the answer gets fuzzy. Our brains remember individual purchases, not long-term patterns, which is why people are often shocked by things like, credit card statements, annual insurance bills, and how much ‘small treats’ really add up.
Future you doesn’t feel like you
Studies show that when we imagine ourselves decades in the future, the brain responds similarly to when we think about other people. So, when you save money for retirement, it can feel a bit like giving money to a stranger. Faced with the choice between spending money today or saving it for a vague version of yourself in 25 years, most people will instinctively choose ‘today’.
Instead of fighting this, a better question is: If my brain works this way, how can I set up my money so the right things happen anyway?
Strategy 1: Automate Your Retirement Savings
The reason KiwiSaver works so well in New Zealand is that it’s built around human behaviour. Contributions are automatic (you don’t have to decide every payday), and employer contributions and government incentives boost progress.
Automation removes daily decision-making from the equation. You can apply the same principle beyond KiwiSaver by:
- Setting up automatic transfers to a savings or investment account
- Treat savings like a non-negotiable bill
- Spending only what remains in your everyday account
The less discipline required, the more consistent your retirement savings becomes.
Strategy 2: Make Future You Feel More Real
If future you feels like a stranger, get to know them.
- Write a short letter from your future self, imagining yourself at 70 or 75. Where are you living? What are you grateful your younger self did?
- Picture specific moments like, walking on the beach midweek, having a coffee without worrying about money, spending time with grandchildren, etc.
- Think beyond yourself. Your future partner, family, and independence all benefit from the choices you make now.
When future outcomes feel personal, saving becomes more meaningful.
Strategy 3: Make the Numbers Visible
Because our brains struggle with long term tracking, a short spending review can be powerful.
Every few months:
- Review 1-3 months of transactions
- Group spending into essentials, and discretionary costs
- Look for easy wins like unused subscriptions or low value spending
Tools like the Sorted retirement calculator can help turn abstract ideas into something tangible. For example, turn “I should save more” into “If I change my fund type or contribution rate, here’s what my balance might look like at 65”. Turn “I have a lump sum” into “Here’s how much income I could draw out every year, and for how long”.
One Small Change at a Time
You don’t necessarily need a perfect KiwiSaver fund, an ideal contribution rate, or a flawless retirement plan. Instead, consider “what’s one small change I could make this month that future me would appreciate?”.
Saving for retirement feels hard because your brain is focused on today, and future you feels distant. So instead of trying to become someone with endless willpower, build systems that work for the person you already are, and focus on small, sustainable changes.