When it comes to saving, workers under the age of 52 seem to get it. Millennials and Gen Xers seem to be acting on the message that saving for retirement should be a priority.
Among this group, those who are saving 90% or more of the maximum allowed by the Internal Revenue Code in their 401(k) account say retirement is one of their main savings goals. In fact, more than twice as many pointed to retirement as their savings goals than said the same about raising a family, which came in at 40%. Of course, saving at a rate of $16,200 to $18,000 per year (90% to 100% of the maximum allowed) means sacrifice. These workers appear ready to make necessary sacrifices, according to a recent survey.
Prioritization, they said, is the key. About 47% of the “super savers” said they are driving an older vehicle in order to direct dollars into their retirement savings. Many (45%) choose to live in a modest home, and 42% travel less than they would like. More than one-fourth of them work extra hours in an effort to accumulate more for retirement.
There are a number of ways that millennials and Gen Xers are able to save so much for retirement. Many say it’s a matter of prioritization, and making small sacrifices today helps them better prepare for tomorrow. Where can the average saver start? Some of the top areas “super savers” compromise are:
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