road with years printed on it leading to horizon In the case of retirement saving, if theproblem is retirement is “beyond the horizon,” the trick would beto bring the horizon closer. In other words, identify nearer-termgoals and milestones. (Photo: Shutterstock)

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For a journalist, there comes a time when there is no tomorrow.A single deadline morphs into a series of cascading deadlines, eachbuilding upon the other, until the final deadline comes – and a newcolumn emerges.

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I mention this for two reasons. First, April 18th is NationalColumnist Day. It was on this day in 1945 that Ernie Pyle waskilled in a burst of enemy machine gun fire while covering thePacific Theater on Ie Island.

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Pyle had a gift for writing with elegance yet commonfamiliarity. If you haven't read his columns, you can find themat this Indiana University site. You will no doubtagree Ernie Pyle is one of the best all-time columnists.)

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The second reason for mentioning deadlines deals with a majorchallenge facing many retirement savers – or, rather,“non-savers.”

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There are many reasons why people put off saving for retirement(see “How to Counter the Top 5 Excuses People Are Usingto Explain Why They're Not Saving Right Now for Their OwnRetirement,” FiduciaryNews.com, April 16, 2019). The mostprominent of these is the classic Mañana Syndrome – putting offuntil tomorrow what should be done today.

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Quite simply, people don't see saving for retirement asimportant because they can't see retirement. They can't see itbecause it lies beyond the current horizon. Think about itthis way. When you stand on high ground, you can see everythingaround you. What you can't see is what exists over thathorizon.

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Retirement saving, therefore, becomes anout-of-sight-out-of-mind issue.

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It's actually a little more than that.

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Returning to our “high ground” metaphor, imagine standing onthat elevated piece of land and seeing a raging bull speedingtowards you. How do you react?

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Let me rephrase that. How would you react if the bull is twentyyards away? How would you react if the bull is twenty miles away?Can you explain the difference in your reaction?

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This is a form of “recency,” the phenomenon from behavioralfinance that suggests we respond more frequently to stimuli mostrecently experienced. A good way to understand this is to name thebest all-time quarterback (since we've already established the bestall-time columnist).

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Today, many will name Tom Brady or Peyton Manning. Why? Becausethese two have been the top quarterbacks in recent years. Lower onthe list might be Joe Montana. Still lower might be Johnny Unitasand perhaps Otto Graham. Likely not even on the list is Sid Luckmanor Sammy Baugh. Yet, in retrospect, serious students of the gamecan make a good case that these QBs from long ago eras are bettersuited for the “best all-time” label.

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That's the consequence of “out-of-sight-out-of-mind.”

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While the debate of best all-time quarterback makes a greathappy hour conversation, there's no real harm if the opposing sidesfall prey to recency (arguing Brady vs. Manning as opposed to Baughvs. Luckman).

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Falling prey to recency when it comes to saving for retirement,on the other harm, can lead to dire circumstances when it comestime to hang up the cleats. Fighting this battle in the hearts andminds of employees is a constant struggle for retirement plansponsors and financial fiduciaries.

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But, how can it be done successfully?

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In the case of retirement saving, if the problem is retirementis “beyond the horizon,” the trick would be to bring the horizoncloser. In other words, identify nearer-term goals andmilestones.

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Perhaps it's fitting to revisit that routine developed by thecolumnist. Each week is a series of smaller deadline – smallergoals at regular milestones – that, when added together, form thecolumn that's due at the ultimate deadline. (By the way, for thoseof you keeping score at home, this is another behavioral financemarvel known as “framing.” Here, we take the same set of facts andcircumstances and repackage them from a different viewpoint thatprovides a useful guide to better decisions.)

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For retirement savers, various ages can represent “near-term”milestones. Maybe they can be the ages of 20, 30, 40, 50, 60, and70. People like to think in terms of numbers divisible by 10 (or 5for that matter), so these milestones will be quite recognizable(and acceptable) to most retirement savers.

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Once the milestones are identified, then the goals must bedetermined. These can be savings dollar goals associated with eachage milestone. They're likely to be different numbers for differentpeople living in different places. Determining and justifying thosenumber is why financial professionals get paid the big bucks.

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Here's how I might envision this tactic unfolding in reallife:

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Fiduciary: You'd like to live a comfortable retirement,right?

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Saver: Sure, who wouldn't?

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Fiduciary: Very good. How much are you saving right now for yourretirement?

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Saver: Nothing.

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Fiduciary: Why not?

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Saver: Because it's a long way off. It's not important now. I'vegot too many other priorities. I can put it off until tomorrow.

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Fiduciary: I understand that. By the way, for you to live acomfortable retirement, you'll need to have saved x dollars by thetime you're y years old. Is that a reasonable goal?

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Saver: Sure, I don't see why not.

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Fiduciary: Then do you think you can start saving towards thatgoal right now?

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Saver: I guess so.

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Whether the saver actually implements this decision is whyregular “check-up” meetings are important.

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There, I think I've given you enough answers for one column.

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Oh, wait. There's one more.

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“Slingin' Sammy Baugh.” (Look it up.)

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READ MORE:

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Get them addicted to saving —Carosa

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Would rank-and-file 401(k) retirement saversbenefit from working with an advisor?

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Fee compression: Bad for retirement savers? —Carosa

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Christopher Carosa

Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).