Saving for retirement is a modern-day imperative, but even the ancient Greek poet Hesiod – quoted in a new study – advised us not to tarry:
Do not put off till tomorrow and the day after; for a sluggish worker does not fill his barn.
So what about procrastinators, who place more importance on today’s enjoyment than on preparing for the future? The new study asked whether people with this personality trait make different decisions about retirement saving than non-procrastinators and found that they do.
Up to one in five people were procrastinators in the study’s data base of more than 155,000 workers at numerous employers. The researchers identified procrastinators in the sample as the people who waited until the final day of open enrollment to choose their health plan from among their employer options. (To separate them from employees who intentionally delayed so they could collect enough information, the researchers looked at how often people used various online employee benefit tools – these strategic delayers were very active; procrastinators were not.)
The procrastinators, when confronted with a range of retirement saving decisions, consistently made different decisions:
Procrastinators don’t store away as much for the future, because they suffer from a severe case of what economists call “present-bias preferences.” This study, however, offered one bright spot: they are very amenable to letting their employers, through defaults, make these decisions for them.