Memory serves critical functions in everyday life but is also prone to error. This article examines adaptive constructive processes, which play a functional role in memory and cognition but can also produce distortions, errors, and illusions. The article describes several types of memory errors that are produced by adaptive constructive processes and focuses in particular on the process of imagining or simulating events that might occur in one's personal future. Simulating future events relies on many of the same cognitive and neural processes as remembering past events, which may help to explain why imagination and memory can be easily confused. The article considers both pitfalls and adaptive aspects of future event simulation in the context of research on planning, prediction, problem solving, mind-wandering, prospective and retrospective memory, coping and positivity bias, and the interconnected set of brain regions known as the default network.