Why millennial super savers are putting away 15% of their salaries

Iron Man. Wonder Woman. Millennial Super Saver.

He or she is an ordinary human, 18 to 34, who saves at least 15% of his or her salary each year in a 401(k) retirement savings plan. The mission: Save enough to retire comfortably. Or at least retire.

An analysis by Fidelity Investments of the 13 million participants in 401(k) plans it administers found close to 421,000 of these young “super savers,” as Fidelity calls them, accounting for almost 20% of the millennial savers in Fidelity’s database. They save an average of 11% of their salaries; the other 4% comes from a company match. The overall average millennial contribution rate is 6.6%, which rises to 11% with the company match.

It helps that millennial super savers make a lot more money than their non-super-saving peers. The average big saver in the 18-to-34 age range makes $73,000 a year. That’s not investment banker money, but it’s nice compared with the $46,000 average for non-super-savers. Saving can be tough for everybody, but saving when you have a salary that’s 23% higher than the median for your peers is less painful.

Gen X super savers, meanwhile, had average salaries of $108,900, compared with $68,000 for Gen X-ers (ages 35 to 50) who didn’t save as much in their 401(k)s. (Across the millennial and Gen X cohorts, the earnings gap between super-savers and those who can’t manage to save 15% or more of salary is 58%.)

That salary difference enables those higher-earning millennials to save about $4,900 more a year than their peers. And that, in turn, gets them higher average employer matching contributions. The average overachieving millennial saver has an account balance of $43,000, compared with $11,000 for non-super-saver peers.

Saving 15% or more is something to aspire to. But starting to save early, and saving consistently, can also take you a long way. Fidelity found that millennials saving less than 15% but saving consistently for 10 years had balances of more than $100,000. And there are young workers earning six-figure salaries who don’t save at all. The key is being proactive and staying the course when markets get chaotic.

The super-saving ways of these millennials may have come from watching the pain that the 2008-09 stock market turmoil inflicted on baby boomers. A 2014 survey by T. Rowe Price found that millennials tend to have better financial habits than boomers. The Fidelity data show that 80% of the millennial super-savers actively enrolled in their 401(k)s rather than being automatically enrolled when they joined the company.

And how are these precocious savers investing their 401(k) money? Some 63% of the millennial big savers at Fidelity aren’t invested in a way the company considers “age-appropriate” — their portfolios don’t hold between 90% and 95% in equities.

That doesn’t mean they are all super-conservative, the rap millennials usually get, says Meghan Murphy, Fidelity’s director of thought leadership for workplace retirement. About 10% are invested entirely in equities. That group isn’t unique in being heavily into equities, either — about 60% of millennials are 100% invested in a target-date fund, says Murphy, and those funds are big on stocks. Fidelity’s 2050 fund, for example, is about 94% in equities.

It’s not crazy to have such a high equity weighting at a young age, if you’re clear on the risks you’re taking and have a good emergency savings fund so you won’t turn to your 401(k) for cash in a pinch. And if there’s a big market drop, like the one we just saw, you can take some consolation (granted, not a ton) from the dollar-cost averaging you’ve been doing.

You have been doing it, right?