Working Paper: NBER ID: w25238
Authors: Axel H. Börsch-Supan; Tabea Bucher-Koenen; Michael D. Hurd; Susann Rohwedder
Abstract: We define saving regret as the wish in hindsight to have saved more earlier in life. We measured saving regret and possible determinants in a survey of a probability sample of those aged 60-79. We investigate two main causes of saving regret: procrastination along with other psychological traits, and the role of shocks, both positive and negative. We find high levels of saving regret but relatively little of the variation is explained by procrastination and psychological factors. Shocks such as unemployment, health and divorce explain much more of the variation. The results have important implications for retirement saving policies.
Keywords: saving regret; retirement saving; procrastination; shocks; psychological traits
JEL Codes: D14; D15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| negative shock (G41) | saving regret (Y60) |
| positive shock (E32) | saving regret (Y60) |
| psychometric variables related to procrastination (D91) | saving regret (Y60) |
| gap between expected and actual social security benefits (H55) | saving regret (Y60) |