“Temporal discounting” refers to “an individual’s tendency to perceive a desired result in the future as less valuable than one in the present.” It’s sometimes called “time discounting” or “delay discounting.”
Temporal discounting is also the enemy of planning. Why plan for the future when it is of less value than the present? A solid and well thought out plan is a person’s best defense against Temporal Discounting and future disappointment upon retirement.
We live in a world where we have come to expect everything being provided immediately (Instant Gratification), or of being of greater value in the present (Temporal Discounting.) Proper planning is the bridge that connects the present view (Temporal Discounting) to the future view (Plan Success.)
A written plan is the formulation of a process to get us to our plan’s goal with as few changes as possible. (I tend to be a “Measure twice, cut once” person.)
The Plan you prepare should be “measured twice and cut once.” But, it is not written in stone. It will be the roadmap or general guide to follow to start you on the path to your destination. Just as you may have to detour around accidents or new construction following a highway roadmap, you will need to navigate changes to you retirement roadmap as you move towards retirement.
The better your initial Plan (Roadmap) the fewer changes or detours you will hopefully need to take along the way. Since the Plan will be your master roadmap it needs to be slowly and thoughtfully prepared and as precise as possible. It will not be perfect, nor will it be written in stone.
Your plan MUST:
*Be Specific.
*Be Written.
*Create strong reasons.
*Provide a pathway to action.
*Be Thorough.
*Manage, adjust, and track progress.
These plan concepts are the protection and defense against Temporal Discounting. The one biggest problem with temporal discounting is that it prevents a person from envisioning what retirement would look like. (How can you adequately plan for a future retirement that you can’t see?)
In my next blog we’ll build our defense against Temporal Discounting.
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