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.
We thank Laura Carstensen, Margie Lachmann, Andrew Parker and participants of workshops held at the NBER and the Michigan Retirement Research Center for helpful discussions. Hurd and Rohwedder gratefully acknowledge funding from the National Institute on Aging (P01 AG008291) for research support and data collection. Additional funding for data collection came from the Max Planck Society. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.