The Cost of Procrastination

Wayne Gretzky once said, “Procrastination is one of the most common and deadliest of diseases, and its toll on success and happiness is heavy.” This quote rings especially true when it comes to retirement planning. Saving for retirement is no longer optional—it’s a necessity. Yet many people still prioritize today’s pleasures over preparing for tomorrow. In fact, some avoid thinking about the future altogether.

A recent study by Jeffrey Brown of the University of Illinois at Urbana-Champaign explored whether people who exhibit procrastination tendencies make different retirement savings decisions compared to their more proactive peers. The answer was clear: they do.

Procrastination in Action: Study Findings

The study analyzed data from over 155,000 workers across multiple employers. Researchers identified procrastinators as those who waited until the final day of open enrollment to choose their employer-provided health plan. To distinguish between strategic decision-makers and true procrastinators, they reviewed usage data from online benefits tools—those who delayed but were active users were excluded from the procrastinator group.

Here are some key findings:

• Lower Enrollment Rates: Only 7.5% of new University of Illinois employees enrolled in voluntary supplemental retirement plans, despite also having a defined benefit plan. Among procrastinators, enrollment was 2.4% lower—even after adjusting for age.

• Longer Delays: Among those who eventually joined one of the 55 company retirement plans studied, procrastinators took between 44 to 85 days longer to begin contributing compared to non-procrastinators.

• Lower Contributions: Procrastinators contributed 1.3% to 2% less of their pay, on average, than the overall average contribution rate of 7.2%.

• Less Initiative with Investments: In companies with automatic enrollment, procrastinators were significantly more likely to stick with default investment options (like target-date funds) rather than make active investment choices.

A Bright Spot in Default Settings

The research points to a psychological concept known as “present-biased preferences”—a tendency to overvalue immediate rewards at the expense of future gains. This mindset can be dangerous when it comes to long-term financial planning.

However, the study also revealed a silver lining: procrastinators tend to be highly receptive to default settings. When employers automatically enroll workers in retirement plans or select default investment options, procrastinators are more likely to stick with them—which can ultimately lead to better outcomes than if left entirely to their own decision-making.

Takeaway: While procrastinators may be slower to act, well-designed defaults can help bridge the gap between intention and action. If you’re prone to putting off financial decisions, consider setting up automatic contributions and using employer-provided tools. Your future self will thank you.

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