Are mil­len­nial ‘su­per savers’ chang­ing re­tire­ment?

Employee Benefit News - - CONTENTS - BY PAULA AVEN GLADYCH

More younger work­ers are pri­or­i­tiz­ing sav­ing for their post-work years and con­tribut­ing as much as they can to their 401(k)s.

YOUNGER EM­PLOY­EES of­ten get a bad rap for their money man­age­ment and sav­ings habits, but there is a small group of Gen Xers and mil­len­ni­als who are do­ing every­thing right.

New re­search from Prin­ci­pal Fi­nan­cial Group found that there are a num­ber of Gen X and Gen Y savers who are de­fer­ring 90% or more of the IRS max­i­mum amount to their 401(k) ac­counts, which is be­tween $16,200 and $18,000 per year.

Of those in­di­vid­u­als, 91% listed sav­ing for re­tire­ment as one of their main goals. In fact, mil­len­ni­als are twice as likely to say they are sav­ing for re­tire­ment (90%) than rais­ing a fam­ily (40%), Prin­ci­pal Fi­nan­cial finds.

“Th­ese ‘su­per savers’ are in­cred­i­bly driven,” says Jerry Pat­ter­son, se­nior vice pres­i­dent of re­tire­ment and in­come so­lu­tions at Prin­ci­pal. “We see them mak­ing sac­ri­fices to achieve their goals, and some­times that in­cludes de­lay­ing mile­stones un­til they feel fi­nan­cially se­cure. Whether it’s driv­ing an older ve­hi­cle or work­ing ex­tra hours, th­ese in­di­vid­u­als have said, ‘My fu­ture is im­por­tant and I’m go­ing to save to make it great.’”

Much of the fi­nan­cial con­ver­sa­tion is around what dif­fer­ent gen­er­a­tions are do­ing wrong when it comes to money man­age­ment. Prin­ci­pal Fi­nan­cial Group wanted to look at peo­ple who were mak­ing good de­ci­sions to see what they were do­ing to move the nee­dle on fi­nan­cial se­cu­rity.

Su­per savers also take fewer va­ca­tions, drive old cars and buy smaller homes than they would like.

Su­per savers are will­ing to “make mod­est im­pacts on their stan­dards of liv­ing to­day and those im­pacts will have a huge im­pli­ca­tion on their stan­dard of liv­ing 20 to 30 years from now,” Pat­ter­son says. “Th­ese peo­ple made pos­i­tive, some­times hard sac­ri­fices.”

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