Saving Regret: Economic Shocks, Not Procrastination, Drive Under-Saving

New research challenges the widely held belief that procrastination is a primary driver of insufficient retirement savings. A working paper released February 2026 by the National Bureau of Economic Research (NBER) finds that exposure to economic shocks—job loss, medical expenses and unexpected financial burdens—is a far more significant predictor of saving regret than a tendency to delay or avoid financial planning.

The study, conducted by Susann Rohwedder, Michael D. Hurd, and Axel H. Börsch-Supan, analyzed data from surveys of over 6,000 individuals aged 60-74 in both the United States and Singapore. Researchers tested twelve different psychometric measures designed to assess procrastination tendencies. The results consistently showed a weak or nonexistent correlation between these measures and feelings of regret about inadequate savings. In some cases, the relationship even ran counter to expectations—individuals who reported never procrastinating were more likely to express regret, particularly in Singapore.

“We find little evidence to support this view [that procrastination contributes to under-saving],” the authors write. “In both countries, indicators of procrastination have only weak, if any, explanatory power for saving regret.”

The Role of Economic Shocks

In contrast to the negligible impact of procrastination, the study revealed a strong link between negative financial shocks and saving regret. Approximately 69% of U.S. Respondents reported experiencing at least one significant financial setback, and among those individuals, 61% wished they had saved more. Singapore, with its more robust social safety nets and mandatory savings schemes, saw a lower rate of shock exposure (46%) and a correspondingly lower rate of regret (42%).

The types of shocks experienced also differed between the two countries. While health-related expenses were common in both, the U.S. Experienced a higher incidence of job loss, earnings shortfalls, and divorce—events that can have a devastating impact on long-term financial security. The consequences of these shocks were also more severe in the U.S., leading to a greater sense of financial vulnerability and regret.

Singapore’s Institutional Advantages

The research highlights the importance of institutional design in mitigating the financial impact of life’s inevitable setbacks. Singapore’s Central Provident Fund (CPF), a mandatory savings scheme, requires contributions to accounts earmarked for retirement, housing, and healthcare. This system provides a financial buffer against unexpected expenses, reducing the likelihood of long-term financial hardship. While not a perfect system—housing wealth is heavily concentrated, and risk pooling is limited—the CPF offers a level of financial security that is largely absent in the U.S.

The U.S. Unemployment insurance system, by comparison, is fragmented and often fails to reach those who need it most. According to data cited in a related report, only 27% of jobless workers nationwide receive unemployment benefits. The duration and amount of benefits vary significantly by state, leaving many Americans vulnerable to financial ruin in the event of job loss.

Beyond Behavioral Economics

The findings challenge the prevailing wisdom in behavioral economics, which often frames under-saving as a problem of self-control and present bias. While interventions like automatic enrollment in 401(k) plans and default escalation schedules can be helpful, the study suggests that these measures address only a symptom of a larger problem. If the primary driver of saving regret is exposure to unforeseen economic shocks, then policies aimed at strengthening social insurance and providing financial safety nets are likely to be more effective.

The authors also point to the importance of financial literacy, specifically probability numeracy—the ability to understand and reason about risk. Individuals who demonstrated a strong grasp of probability were less likely to express saving regret in both the U.S. And Singapore. This suggests that helping people understand the likelihood of future events and prepare accordingly is crucial for promoting financial well-being.

“The evidence here is fairly clear: when you compare people who weren’t hit by shocks, Americans and Singaporeans look almost identical in their saving satisfaction,” the research indicates. “The gap opens up because Americans face more shocks, more severe shocks, and weaker institutional buffers against those shocks.”

The study underscores the need for a more holistic approach to retirement planning, one that recognizes the role of external factors and prioritizes risk management over individual willpower. Addressing the root causes of financial insecurity—economic shocks and inadequate social safety nets—may be a more effective path to ensuring a secure retirement for all.