Millennial, Gen Z 'super savers' still bullish on hitting retirement goals

Millennial, Gen Z 'super savers' still bullish on hitting retirement goals
Nearly 75% of millennial and Gen Z retirement savers who defer close to the IRS maximum are optimistic about meeting their savings goals and retiring comfortably, a Principal survey shows.
SEP 13, 2022

Recession fears and inflation may be on the rise, but millennial and Gen Z “super savers” aren't backing off their retirement plans. 

Nearly 80% of millennial and Gen Z retirement savers who defer 90% or more of the IRS maximum to their retirement accounts — also known as super savers — feel financially secure, according to a Principal survey released Tuesday. And three-quarters of those surveyed believe they are successfully balancing and experiencing life today while still saving for retirement.

Along those lines, nearly 75% are optimistic about their ability to meet their retirement savings goal, while 7 in 10 are confident they will be able to financially afford all the activities and travel plans they dreamed of in retirement.

The bullishness doesn't stop there. Nearly three-fourths of super savers consider the current market as a “buying opportunity.”

"Money doesn't buy happiness, but it does buy flexibility, and many millennials and Gen Z want to have good experiences in life. They are more interested in having a good work-life balance today than when they reach retirement age, so they are more conscientious about saving to achieve that goal sooner than later," said Jeff Brown, president of BWM Financial, a unit of Stratos Wealth Partners.

The Principal study showed three-fourths of super savers plan to save more than $15,000 for retirement this year, primarily in employer-sponsored retirement plans, traditional savings accounts, and Roth IRAs. Moreover, nearly half (47%) are looking to save more than $2 million by the end of their working years, with more than one in four (27%) anticipating more than 35 years in retirement. 

Despite their ambitious retirement plans, super savers are indeed concerned about inflation and a potential recession. That said, most (82%) are confident they’re in good shape to endure short-term impacts and ongoing market volatility. They're also rolling with the changes, with more than a third altering their investment strategy in response to the volatility of the last year. 

And they are making life changes as well, with nearly 20% starting a new job in the past 12 months.  

Finally, the survey revealed when and where they learned their impressive savings habits. Super savers cited their parents as their biggest influence, and more than 60% established their habits before reaching their 30s.   

“I believe that money, and how you spend and save it, is based on values you develop early in life. Money is emotional, so hearing that the feeling of financial security is more important now, given higher inflation and rising health care costs, makes sense to me," said Melanie Jones, senior vice president at Evoke Advisors. "Those who saw parents emphasize prudent spending, or the dramatic opposite, are likely more anxious about an impending recession and are saving more and allocating to potentially safer asset classes.”

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