Regrets about Not Saving More

What are the chances you will regret not saving more money when you were younger? Better than even, according to a National Bureau of Economic Research study of "saving regret."

NBER researchers measured saving regret by surveying a nationally representative sample of Americans aged 60 or older using the RAND American Life Panel. Respondents were asked to think back to when they were 45-years-old. If they could re-do their spending and saving from then to now, would they save more, save the same, or save less? The finding: Most wish they had saved more when they were younger. Fully 58.5 percent had saving regret.

The researchers correlated saving regret not only with demographic characteristics, but also with other factors such as income shocks—both positive and negative—and personality. Fully 68 percent of respondents with negative income shocks had saving regret. Among those with positive income shocks, a smaller 49 percent had saving regret. Respondents whose planning horizon was longer than 10 years were less likely to have regret (51 percent) than those who planned only a few months ahead (65 percent). By demographic characteristic, younger respondents were more likely to have regret. Among respondents aged 60 to 64, two out of three (65 percent) had saving regret. Among respondents aged 75 or older, the figure was 42 percent. While 45 percent of respondents with a graduate degree had saving regret, the figure was a larger 61 percent among those with a high school diploma or less education.

As you can see from the above statistics, feelings of regret are common—even among those who are seemingly on top of their game. "Perhaps regret or the wish to re-do past decisions is part of the human condition," conclude the researchers. Even among respondents in the top income and wealth quartiles, regret is substantial—39 percent of those in the top wealth quartile and 46 percent of those in the top income quartile had saving regret.

Source: National Bureau of Economic Research, Saving Regret, Working Paper 25238