Principal^® survey finds retirement “Super Savers” undeterred by market volatility and inflation, prioritizing lofty savings goals

New survey findings from Principal Financial Group^® shows retirement “Super Savers” are prioritizing their long-term savings goals even with market volatility, inflationary pressures, a threat of recession, and rising health care costs all weighing on their minds.

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, which is up from 51% in 2021. That’s largely attributed to the majority of Super Savers (82%) feeling confident they are in good shape to endure a recession and the sacrifices they are willing to make to their daily expenses to maximize their retirement contributions.

“From continuing to save through an inflationary period to establishing long-term financial goals, Super Savers embody some of the best practices for retirement saving that gives them the mental and emotional strength to stick with their plans even during times of market uncertainty,” said Sri Reddy, senior vice president, Retirement & Income Solutions at Principal. “Their savings habits go to show you can tuck away for the long-term while living in the moment today.”

Even with markets down this year, nearly half (45%) of Super Savers have made no changes to their investments while those who did take action opted to:

• Confirm asset allocation aligns with investment risk (34%)
• Review asset allocation within retirement account to verify proper diversification (25%)
• Increase the amount invested into more aggressive investments (13%)
• Move money from typically less risky investments into aggressive investments (11%)
• Move money from investments experiencing a decline into less aggressive investments (7%)
• Move money into more liquid assets such as cash, bonds, or CDs (6%)

Instead of making investment changes, two-thirds (67%) of Super Savers are making lifestyle changes to counter inflation, including adjusting entertainment and travel spending as well as reviewing spending habits and monthly budgets.

Three-year outlook for Super Savers

Paying off debt was the No. 1 financial priority over the next 2-3 years for Super Savers in 2021. However, the top priorities shifted in 2022 to revolve mostly around increasing retirement savings. Continuing to save more in an IRA (29%) jumped to the top of the list while increasing the amount contributed to employer retirement plans tied for second with paying off debt at (25%).

These priorities are consistent generationally as continuing to save more in an IRA was in the top three financial priorities for Generations X, Y, and Z. Increasing the amount contributed to employer retirement plans also placed in the top three priorities for Generations X and Z.

Views on retirement changing?

While the percentage of Super Savers who plan to fully retire (32%) is unchanged from 2021 to 2022, those who prefer a phased retirement spiked higher in this year’s survey. This pushed the number of individuals who no longer plan to work in their main career but still earn an income working less than 40 hours per week into the majority at 54%—a 13% increase over 2021.

This coincides with a rise in the number of Super Savers who plan to retire before age 65—up 6% in 2022 to 66% overall. Both Generations Y and Z are the most eager to reach their sunset years. On average, Generation Y respondents are planning to retire at age 58 and Generation Z by 57.5.

Where Super Savers get financial information

To execute on their long-term retirement goals, Super Savers are primarily looking to financial institutions for support. Their No. 1 trusted source for information is a financial professional (48%). Financial company websites or mobile applications (40%) and retirement plan service providers (37%) placed second and third, respectively.

Generations X and Y both prefer information from a financial professional above all else. However, Generation Z relies on family and friends first (55%).

“Super Savers are savvy and perceptive, so it’s encouraging to see such a high percentage of them looking to financial experts for information and guidance,” Reddy said. “No matter where an individual is at in their savings journey, it’s never too soon or too late to get support to ensure your personal finance situation and long-term goals are aligned.”

More key findings from the annual Super Savers retirement study can be found at principal.com.