What differentiates big retirement savers among millennials and Gen Xers from everyone else?
It’s a question that Principal Financial Group posed to a couple of thousand participants in defined contribution plans who contribute 70% or more of the allowable maximum, which is $19,000 for 2019.
The survey divided this group in two: those who saved 90% or more of the maximum allowed, or $17,100, called super savers, and those who saved 70% to 89% of the maximum allowed, starting at $13,300, termed pre-super savers.
Not surprisingly, super savers, usually even more than pre-super savers, were motivated by wanting to feel financially secure (62%), to have a good lifestyle in retirement (57%) and to be prepared for the unexpected (43%).
Super savers and pre-super savers were almost equally willing to make some sacrifices in purchases and services consumed in order to save more. Roughly 40% of both groups said they were driving older vehicles, owning a modest home, traveling less than they preferred and engaged in do-it-yourself projects instead of hiring outside help.
Few reported delaying starting a family (12%) or not saving enough for their kids’ college education (9%) in order to save more.