Inspire your employees to become “super savers”


What do a 30-year-old bookkeeper from Oregon and a 37-year-old school consultant from Minnesota have in common? They are both on track to retire early, perhaps at age 55.

When Erynn Ross returned home to Oregon after graduating from college, he knew he would save money living with his mother. What he didn’t expect was that she would tell him he could pay his rent or put into an index fund.

“It really started the save train,” says Ross. He started investing, contributing to a 401 (k), and paying off his debts. At the age of 27, he was saving the maximum amount allowed in his 401 (k). And that makes him a “super saver”.1

Ross says he wasn’t always so keen on saving, but his mom wanted to instill good habits in him when he was in high school. “She had already set up an IRA for me. We came to a compromise that 75% of my paycheck went to retirement, ”Ross said. “As a teenager, I wasn’t very happy about it.” (He’s thankful now.)

Bekah DeJarlais of Rockford, Minnesota took a slightly different route to his Super Savings track. Buying her first home at age 25 and taking a higher paying job three years ago has helped her increase her savings in the long run.

This first house was small and unassuming, but she sold it nine years later as the neighborhood in which she lived grew. “People couldn’t afford Minneapolis, so they were flocking to my suburb. It was a great time to sell, ”she says.

DeJarlais started maximizing her 401 (k) when she started her new job, but it has also helped her save money in other ways. At the time, she and her husband were driving cars from 2004 and 2005. Because her new job included a company car, they were able to sell hers and buy her husband a newer car. They also took the amount she had spent on insuring her old car and put it in savings. That’s when they started paying for their auto insurance every six months, instead of monthly, which meant a lower premium.

As she watches her spending and always looks for ways to increase her savings in modest ways, DeJarlais says she doesn’t live on a budget. What she does is pay herself off first by saving for retirement, covering the bills, and then trying not to spend more than $ 200 on “fun” money.

FINANCIAL ADVICE FOR OTHER SUPER-SAVERS

Ross shares what works for him when it comes to money management.

He usually only changes his investment strategy if his financial professional recommends it. “I count on him and I trust him. (55% of super savers say they work with a finance professional or plan to do so in the future.)

He loves to travel and takes at least one big trip a year. But he’s saving the money he’ll need before he leaves, rather than incurring credit card debt.

He uses credit cards to get the points but pays them in full each month.

Ross believes in staying healthy no matter what the cost. He’d rather spend the money now – on a fitness membership, eat healthier, or buy new running shoes – than spend it later on health issues.

Because his father passed away in eighth grade, he got the mentality to prepare for the unexpected. Ross has purchased a 20-year term life insurance policy and disability coverage. “I believe in insurance. It is a good investment. If anything happened to me, my fiancé would be fine financially.

SO HOW DID THEY CHANGE THEIR FINANCIAL STRATEGY THIS YEAR?

Super savers are still hiding money, despite recent market volatility and a global pandemic. The overwhelming majority (97%) say they feel comfortable managing their finances with uncertainty.

  • 75% of savers say the current market is a buying opportunity.
  • 30% invested additional money in the market.
  • 95% say they are in good shape to weather a recession.
  • Only 5% decreased the carryover / savings / percentage of their retirement savings.

Has DeJarlais considered saving less this year? “Not really. My fear is that if I saw it, I would spend it.

HOW DO YOU KNOW IF YOU ARE A SUPER SAVERS?

  1. You are a member of Generation X, Generation Y, or Generation Z.2
  2. You save (a lot) of money for retirement, either 90% or more of the maximum amount allowed by the IRS, or you carry 15% or more of your salary back to your employer-sponsored retirement plan.

Does this sound like you? How about this: According to new research from Principal®, super savers prefer long-term sacrifices over short-term reductions in their daily expenses to maximize their pension contributions.

NEXT STEPS

Receive our latest updates and information to take care of your employees.

  1. The 2020 Principal® Super Saver survey was sent to Gen Z, Gen X and Millennials who work for companies where Principal is responsible for their retirement accounts and who have saved 90% of the amount. maximum IRS 2019 allowed under a pension plan. or deferred 15% or more of their salary to a retirement account. The survey was conducted from June 12 to 22, 2020.
  2. Gen X (born 1965-1980), Gen Y (born 1981-1996), Gen Z (born 1997-2012).

The subject of this communication is educational only and provided with the understanding that Principal® does not provide legal, accounting, investment or tax advice. You should consult appropriate legal or other advisers on all matters relating to legal, tax, investment or accounting obligations and requirements.

Investing involves risks, including possible loss of capital.

Insurance products issued by Principal National Life Insurance Co (except New York) and Principal Life Insurance Co. Securities offered by Principal Securities, Inc., 800-247-1737. Principal National SIPC Member, Principal Life and Principal Securities are members of Principal Financial Group®, Des Moines, IA.

Principal, Principal and Symbol Design, and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc., a member of Principal Financial Group.

About Ian Crawford

Check Also

Retirement savings on PIP: How can I provide a pension for my daughter who is applying for a PIP | Personal finance | Finance

“I have a 40 year old daughter who is autistic (high scale) currently on PIP. …