Excessive discounting, longevity expectations, and retirement saving: An online survey

Abstract

I report results of a major online experiment focused on two behavioural mechanisms that might affect long-term saving: impatience (excessive discounting) and distorted beliefs about own longevity. I observe the longevity expectations to be generally reasonable, both in terms of their mean values and their determinants, although the estimates show large variance and, on balance, slight pessimism. In line with previous studies, I find excessive discounting and (self-reported) insufficient retirement saving to be prevalent. Both expectations and excessive discounting affect retirement saving in the natural direction. However, there is no link between these two determinants: neither overly optimistic nor pessimistic predictions concerning own longevity seem to be systematically linked to excessive discounting. Thus, these two behavioural effects neither strengthen nor cancel each other out.