How Do You Plan for a Future You Can’t Accurately Predict?

In 1992 American political scientist Francis Fukuyama published The End of History and the Last Man. This highly regarded book declared that global politics had reached its final stage. Liberal (in the classical sense) democracy would continue to spread until it was the standard form of government for the nations of the world.1

At the time, with the fall of the Soviet Union and burgeoning democracy movements around the globe, it seemed like Fukuyama was merely stating the obvious. Who wouldn’t want a western-
style government?

However, with more than thirty years of hindsight, including the war on terror, the resurgence of Russia and China, and a worldwide shift toward greater tribalism, it now seems like history didn’t “end” as promised. There have been huge societal changes that Fukuyama’s theory simply didn’t predict.

It turns out that the end of history illusion doesn’t just apply to political scientists. We all suffer from an inability to see ourselves changing substantially from how we are today.

About a decade ago, a research team conducted a series of studies where they measured people’s perceptions about how much they’d changed in the past versus how much they expected to change in the future.2

For example, a 40-year-old would be asked about the ways they had changed since they were 30. Then they would be asked to predict the ways that they would change as they reached 50.

Contrary to logic, participants acknowledged significant transformation from the past, but predicted very little change in the future. We tend to see ourselves as having reached our final point of development and believe that we will remain essentially unchanged in the future. In a sense, we tend to think we’re at the end of our own history.

Aside from being an interesting blind spot in the human psyche, the end of history illusion does have significance for retirement planning. As you think about your post-work years, you need to be sure that you’re not just projecting exactly who you are today into the future.

Noted retirement strategist Michael Kitces suggests that, while specific goals are important for saving, you shouldn’t lock yourself into a future that won’t fit who you are (or might be) in twenty years.

What studies suggest, writes Kitces, “is that at a minimum, the way that we save and invest toward retirement (and other) long-term goals should probably be deliberately flexible.”

It’s not possible to predict exactly who you will be in retirement. There’s no way to foresee how unknown future events will shape you. But you can be sure that it won’t be exactly who you are today with just a little more gray hair.

Your trusted advisor can help you explore and plan for the possibilities you dream of, while helping you maintain the flexibility to handle the surprises that life will send your way.