Amidst all the current financial uncertainty–market volatility, inflation, rising health care costs, and talk of recession —a new study has found that the group referred to as “super-savers” is right on track with their retirement savings plans. The annual Super Savers study from Principal® found more than half (59%) of survey respondents said they plan to save more than $20,000 towards retirement in 2022.
A Super Saver is defined as someone who contributes 15 percent of their income, or at least 90 percent of the allowed contributions, to a 401(K) or similar plan. Contrary to the idea that to be a Super Saver you must be financially successful, the survey found that the annual income ranged from as little as $35,000 to more than $500,000 a year.
Here are some tips from the habits of these Super Savers:
Make adjustments in your daily lifestyle choices
Review your budget and make cuts where you can. This can boost the amount you can put away each month. It’s a small adjustment to make your own coffee and lunch every day. A fancy coffee can cost as much as $5. A simple sandwich from a fast-food place can cost another $5. That’s more than $1000 a year that could be going into your savings account.
Don’t follow trends
The pressure to Keep Up with the Jones’ can start young. Little Johnny next door has the latest sneakers that cost $100 a pair. You feel you must also have them to be “in.” And this continues into adulthood. Wean yourself off wanting things that are not necessary, just desired.
Drive an older car.
Super Savers drive older cars. That means saving on monthly payments. Keep the car in good repair and it will save you money in the long run. If you save a few hundred dollars on a car payment each month, that’s $3000 a year. Even with service and repair costs, you will still be able to boost your savings significantly.
Pay credit card and other bills on time
Paying your bills on time is an important aspect of taking control of your financial life. Knowing when your bills are due and making a habit of paying them by the deadline can reduce your stress, save you money, and boost your credit score.
Increase your financial literacy
Handling your money wisely starts with understanding financial concepts and using that knowledge to further your financial goals. You can’t control what you don’t understand. Find reliable sources of financial education and make it a habit to increase your knowledge.
Get advice from a financial professional
Super Savers rely on financial advisors for assistance and strategic advice. “It’s never the wrong time to ask for help and support to achieve your financial goals,” says Michael Norton, Senior Vice President, Investments for David Lerner Associates. “They can advise you on how to adjust your savings plan and increase your retirement investment.”
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