Market Overview

These Gen X and Gen Y 'Super Savers' Are Maxing out Their Retirement Accounts

Share:

New research from Principal® explores what
makes these savers tick

Gen X and Gen Y ‘super savers' deferred 90 percent or more of the IRS
maximum ($16,500-$18,000) to their retirement accounts in 2017. That's
according to new research from Principal
Financial Group
® which found that while retirement may be
a distant goal for many in the group, more than half saved over $20,000
for retirement in the last year.

So, what drives their motivation for saving? Sixty-five percent cited
the simple "having a good life during retirement," and another 47
percent said a desire to pursue passions in retirement comfortably.

"There is no better advice I can give anyone than save more, earlier,"
said Jerry Patterson, senior vice president of retirement at Principal.
"These ‘super savers' are making sacrifices today that should help set
them up to have the freedom to do the things they want in the future."

Being a ‘super saver'

Interestingly, the overwhelming majority (70 percent) are making maximum
contributions without having a formal budget in place, instead favoring
other sacrifices to max out their retirement contributions. The top
sacrifices ‘super savers' cite include:

  • Travel: Millennials aren't seeing the world nearly as much as
    they'd like, with 41 percent limiting their travel expenses.
  • Homes: ‘Super savers' live in humble dwellings, with 31 percent
    of Gen Y owning a modest home at the expense of savings.
  • Stress: For both generations, high work-related stress (44
    percent) comes alongside the desire to max out retirement savings.

Still willing to splurge
‘Super savers' have a few items
worth a splurge. More than half (51 percent) cite travel as their top
splurge expense, with subscription entertainment services such as
Netflix or Hulu (44 percent) and general shopping splurges (27 percent)
making the cut, as well.

The role of family
Family is important to ‘super savers.'
Nearly three-quarters of ‘super savers' (72 percent) learned nothing or
very little about personal finance in school. Instead, they
overwhelmingly cite their parents (41 percent) as the top influence for
their savings habits. Additionally, a third of respondents cited their
parents financial situation as a driver in their own savings habits.

"The more we learn about what makes these ‘super savers' tick, the more
may want to emulate their savings habits," added Patterson. "These
savings habits are especially impressive considering most don't have a
formal budget. This underscores the importance of retirement plan
features like auto-enrollment and auto-escalation. With these features,
these ‘super savers' exemplify the ‘don't even notice it's gone'
approach."

About
Principal
®
Principal helps people and
companies around the world build, protect and advance their financial
well-being through retirement, insurance and asset management solutions
that fit their lives. Our employees are passionate about helping clients
of all income and portfolio sizes achieve their goals – offering
innovative ideas, investment expertise and real-life solutions to make
financial progress possible. To find out more, visit us at principal.com.

Principal, Principal and symbol design and Principal Financial Group are
trademarks and service marks of Principal Financial Services, Inc., a
member of the Principal Financial Group.

Methodology
The Super Saver survey was conducted by
Principal between October 19 and November 10, 2017 with 1,498
respondents to the survey.

A survey was sent to Millennial and Gen X participants who work for a
company that has Principal as the recordkeeper for their retirement
account and have reached the IRA max for retirement contributions or who
have saved 90% of the IRS max allowed under a retirement plan. There
were 1,498 responses to the survey. For this research study Millennials
(Gen Y) are individuals born in 1978 – 1995. Gen X are individuals born
in 1965 – 1977.

Insurance products and plan administrative services provided through
Principal Life Insurance Co., a member of the Principal Financial Group®,
Des Moines, IA 50392.

View Comments and Join the Discussion!