Time preference and the importance of saving for retirement

• We model the importance placed on saving for retirement as a function of time preference.
• Time preference is measured through a comparison of dollar values and a combination of intertemporal behaviors.
• Time preference explains retirement saving intention among college students.
• A factor score of intertemporal behaviors has more explanatory power than dollar comparisons.
• Sensation seeking behaviors are less predictive than health-related behaviors.

This study models the importance respondents place on saving for retirement as a function of time preference using a sample of 6812 undergraduate and graduate students. Individual time preference is measured by comparing dollar values over time and through a combination of intertemporal behaviors that may be the most theoretically appropriate measurement of the discount rate for utility over time. Results show strong correlations among decision making domains that involve time discounting. Time preference measured by comparing dollar amounts across time proves a much weaker predictor than a combination of intertemporal behaviors measured either as a linear scale or as factors. In multivariate models, a factor of intertemporal preventive health behaviors is a stronger predictor of the importance of saving for retirement than all other explanatory variables including age, race, parental income, gender, GPA, and college major.