Motivation, cognition, and capacity: How income risk shapes retirement saving in an aging society

Amid China's accelerating population aging and declining basic pension replacement rates, encouraging individuals to build retirement wealth has become a key policy priority. This study uses microdata from the 2020–2023 China Aging Finance Survey (CAFS) to examine how income risk influences retirement saving behavior. Empirical results show that income risk significantly increases both the likelihood and amount of retirement saving, supporting the life-cycle hypothesis of precautionary saving. Mechanism analyses reveal three behavioral pathways: (1) perceived income risk heightens concern about future income shortfalls, motivating saving; (2) risk exposure increases attention to financial information, though limited literacy and cognitive biases may hinder action; and (3) financial access and decision-making autonomy shape the ability to respond. Heterogeneity analyses show stronger effects among urban residents and older cohorts, while rural and younger individuals face greater barriers to translating risk awareness into saving behavior. This study contributes to the literature on life-cycle saving and behavioral finance by offering new micro-level evidence on how income uncertainty drives retirement planning and provides policy implications for strengthening financial motivation, literacy, and access.