Want to Save More? Plan for Regret.

No one likes to feel regret. (“What? Maggie, I think you’ve sufficiently covered regret. You’ve covered both common life regrets and common business regrets and used research to tell us how to experience less regret.”) But sometimes, regret can be good. No, I’m not saying you have to experience regret. You just have to PLAN to experience regret? (“huh?”) Let me explain…

Why don’t people save money? Because they want money now. Will they want money later? Sure, but because of temporal discounting, people value today’s dollar more because it’s in front of them and can be used immediately, so they give up the power of compounding to spend that money today. We know, from research, that people that view their present selves and their future selves as different people do not save as much as those that can picture their future self as closer or the same as their current self. We’re more likely to make good choices for ourselves than we are for some stranger we hardly know. If you woke up and found out the $100 in your pocket could have turned into $1,000,000 overnight if you had just invested it (super explosive market!), would you regret not doing it? Of course! So would I! But we’re not good at translating that to finding ourselves at age 65 with barely enough to live on and anticipating that regret.

A study out of Australia sent a questionnaire to 20,000 people that were a part of four large Australian retirement funds (or superannuation funds as they are called there). 2,339 responded. The questionnaire asked questions about contributing more to the retirement funds. It gathered information about if they had contributed extra in the past, if they intended to contribute more in the future, and interspersed questions about attitudes and future regret throughout to see how those would impact the intentions to save more.

The questionnaire asked people to rank their agreement with statements such as:”If I did not [save more for retirement], I would feel upset” or “I would feel regret.” Overall, respondents had a moderate anticipation of regret and a moderate intention to save more. Attitude was not a significant predictor of intention. However, the study found that the direct impact of regret anticipation was significant. Higher anticipation of regret was associated with higher intention to save scores. Picture yourself at 65 (not some stranger, YOU). Where are you? Are you mad at yourself for ending up there? Are you still working? By choice? How much regret do you feel? I know I would be darn mad at myself for being so selfish and I would have a lot of regret. Because of that, I plan to save more so I don’t end up there!

Interestingly, people who had never contributed extra to retirement funds had a much higher correlation between anticipated regret and intention to save more. Maybe the idea of saving more than required was new to them. Maybe no one had ever pointed out it might not be enough. In the end, anticipating regret led to many more people saying they would contribute more to their retirement funds in the next year.

Also, anticipated regret was a bigger indicator on intention to save than general attitudes towards saving. Get some anti-savers in the room and tell them to anticipate the regret they are going to feel by not saving and see what happens. It turns out, they’ll plan to save more.

If you’re working towards early retirement, it’s a lot easier to anticipate regret. Every extra payment toward retirement funds directly correlates to an earlier retirement date. If you don’t make that extra payment today, you’ll regret having to work an extra year later. Dwell on that. And minimize that regret by throwing more at your savings. Your future self will thank you.

And my future self is going to thank me. “You’re welcome, Maggie. By the way, you’ve aged nicely. 65 looks very similar to 35! I’m so glad you’re living such a fulfilling life! You haven’t worked for over 25 years? That’s amazing! Look at all the things you’ve been able to do! Well done!”

What other decisions are influenced by anticipated regret? Do you think anticipated regret is a good motivator? 

Anticipate Regret


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  1. Do you think it’s a good thing or a bad thing that my unspoken motto has for years been “Live to avoid regret”? 😉 We try hard to see the positive in things, but man, sometimes you just can’t escape those little pangs of “I wish we’d saved more sooner,” or “Why did we waste money on that?” I think regret avoidance is a powerful motivator for me personally, and thanks for highlighting that social science backs this up! I’ll keep at it. 🙂

    • MaggieBanks

      I think the motto fits nicely into the research. If you have that potential regret in mind, you WILL live your life to avoid it! So much about good finances is about being able to consider yourself in the future. There is a big disconnect there.

  2. Anticipated regret seems to drive a lot of people. I guess I’m more of a worrier than I realized. But I think it steps from a shaky career. I was laid off from my first job. So, I’ve anticipated that could happen again at any time! Thanks for the thought provoking post, Maggie!

    • MaggieBanks

      Being unemployed for ten months in 2009 impacted us as well. We’ve always been ready for a job loss since then. But figuring out what we really wish we could do and then doing it will help us so much in the future. That’s what we’re working on now. 🙂

  3. I already regret not ramping up our retirement savings the way I kept meaning to. I’m going to try to make next year the year of a fully funded SEP. A relative is going to try to get back to giving us some money to help with retirement savings, so… here’s hoping.

    • MaggieBanks

      we’re hoping to fully fund a few retirement funds next year we haven’t had a chance to this year as well. Good luck!

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