'Supersavers' Maxing Out Retirement Accounts
Among Gen X and millennial survey respondents, 70% are making maximum contributions. But they're also making some sacrifices.
Millennials may have conflicted attitudes toward money, but according to a study from Principal Financial Group, a lot of them are razor-focused on retirement. In fact, so are quite a few Gen Xers—and together, they make up a group Principal has christened “supersavers.”
The 2018 Super Saver Survey reveals that, among the GenX and millennial respondents, 70% are making maximum contributions without even having a formal budget, relying instead on major financial sacrifices to do so.
What are they sacrificing? It depends a bit on their generation, although 44% of both GenXers and millennials report high levels of work-related stress. After that it diverges a bit, with 41% of GenXers limiting their travel while millennials occasionally splurge on it; still, 38% of millennials also limit their travel.
More GenXers drive an older car (40%) than millennials (38%) and own a modest home (35%, compared with millennials’ 31%). In addition, 33% of GenXers report working more and taking time away from family. In contrast, 35% of millennials report having no house cleaner as one of the major sacrifices they make to save for retirement, compared with 30% of GenXers.
Millennials are also more likely to buy secondhand than new, with 20% reporting that they do so, compared with just 14% of GenXers. But GenXers are slightly more likely than millennials to take on do-it-yourself projects, (31% compared to 29%), rather than hiring someone else.
Millennials do like their splurges, though, with 51% citing travel, 44% subscription entertainment services and 31% entertainment expenses as things on which they spend their money.
In addition, 70% of respondents overall say they learned very little or nothing about personal finances in school. However, apparently the financial crisis and Great Recession has taught them to be wary—in particular millennials, who started saving for retirement earlier in their lives than GenXers. Ninety percent of them have an emergency fund, too.
But their savings levels really are remarkable, with 55% of millennial respondents and 59% of GenXers having put away more than $20,000 in 2017. Yet just 20% feel this makes them supersavers—but 60% of these supersavers are teaching others how to become a supersaver.