Eighty-two percent of super savers say they’re in good shape to endure a recession. Learn what worries them—and what doesn’t—in today’s economy.
They save generously for their futures. Live modestly—making sacrifices without pinching pennies. And maintain emergency savings accounts that cushion tough times. We call them super savers: a set of Principal® customers who don’t necessarily make or have the most, but who epitomize what it means to work toward and achieve financial security.
Who’s a super saver?
401(k) participants who either:
of IRS retirement contribution maximums
Super saver stat
of their salary
Strong financial habits go a long way when the economy is good, but when it flails—when housing prices spike, inflation is on the rise, and forecasts of a recession hit headlines—stability is all the more valuable. “Encountering unknowns is a fact of life,” says super saver Brandon Schaffer. “Being prepared with personal finances as best as you can will hopefully help you weather those storms.”
See how three super savers with varying situations feel about today’s biggest economic hurdles.
Super saver profiles
|Brandon Schaffer||Fanny Hamilton||Erica Leresche|
|Age 39; married with four kids||Age 36; married||Age 28; in a relationship|
|Works as a night nurse||Works as a quality engineer||Works as a mortgage loan underwriter|
|Owns a hobby farm in South Dakota||Rents a home in Ohio||Owns a house in Oregon with her significant other|
Living in housing market uncertainty
Rents in some markets have spiked to record levels, mortgage rates are as high as they’ve been since 2008, and no one’s sure when housing prices will level out. Super savers seem to be dealing by staying put and continuing to save.
Super saver stat
77% own their home
12% purchased property in the past year.
62% of those who don’t own a home attribute it to high prices
in their community.
The renter: Super saver Fanny Hamilton has a down payment ready to go and says she’s “just waiting for the right time in the market to buy.” She and her husband previously owned but now rent. “We don’t think it’s worth the money for what you’re getting right now. Renting is money that goes almost wasted, but at the same time, mortgage rates and property taxes are high, too.” She’s willing to wait for the right time and the right place, with hope that they’ll enjoy their next home and community through retirement.
The homeowner: On the flip side, watching housing values spike can be a delight for homeowners. “It’s super tempting to sell, but I know it’s inflated value,” says super saver Erica Leresche. Realistically, she plans to stay in her house for the foreseeable future. Her focuses: paying off her mortgage and remodeling “at the speed of cash,” she says. Reflecting super savers’ modest tendencies, she’d rather have her home in the city paid off than a mortgage on the home of her dreams in the mountains.
The rental-property scout: With some regret that he didn’t buy rental property before the spike in prices, Schaffer’s now working to save a higher-than-expected down payment. “The fluctuations over the last year and a half have put a damper on the situation,” he says. “But if everything goes well—and if the market would just stop increasing at such crazy rates—I hope that this time next year we’ll have enough for a down payment.”
Thinking of buying? Read “5 tips to figure out how much home you can afford.”
Navigating record-breaking inflation
“You notice it at the fuel pump, you notice it at the grocery store, you notice it in the budgeting apps,” Schaffer says of inflation. Like many super savers, he’s cognizant of the situation and willing to make lifestyle adjustments—but remains less than concerned.
Super saver stats
are making some changes to their expenses due to inflation.
3. Overall budgets
4. Gas and travel
The big saver: “I’ve picked up a few extra shifts here and there to bridge the gap for any increase in spending,” says Schaffer, “but inflation hasn’t changed anything savings-wise yet. Continuing to invest is so important because when the markets are down, it’s like an on-sale situation. Also, always having emergency cash savings is key to weathering any storms.”
Super saver stats
73% say the current market is a buying opportunity.
70% have an emergency savings account.
The take-home-pay strategist: Leresche is all in on saving during these economic headwinds, too—continuing to fund her emergency account and max out her retirement contributions. “This year, I have more going into my traditional 401(k) (pre-tax) rather than my Roth 401(k) (after-tax) accounts, so I have a little more cash flow.” Her paycheck is a little smaller due to reduced work in real estate, so this helps bring her take-home pay back up. Also: “Grocery prices are outrageous. I’ve been meal prepping, trying not to eat out as much, and just being mindful of what I’m spending money on,” she says.
The balance master: Hamilton’s theory: Consider what you value. “There are areas where I’ll spend an extra $200 and areas where I won’t spend an extra $2 or 20 cents,” she says. “It’s about balancing to make ends meet at the end of the month without cutting everything you love out of life.” This is a notable theme among super savers: They enjoy life and spend as they see fit, even as they make sacrifices to save.
Tips to become a super saver
1. Contribute the maximum amount your 401(k) or 403(b) allows—or aim for 10% of your salary. If that’s too much, defer at least enough to maximize your employer match and increase contributions each year or with each bump in pay.
2. Create and maintain an emergency fund.
3. Live within or below your means.
4. Pay off your credit card balance monthly.
5. Be a lifelong learner about finances.
6. Know that market fluctuations will happen—you’re in it for the long haul.
For more tips and stories, read “4 little known secrets from retirement super savers.”
Considering a potential recession
Super saver stat
82% say they’re in good shape to endure a recession.
The long-game investor: “With the market going all wiggly like it is—which very well may continue—I’ve started automating more of my investments. I’m sensitive to seeing my balances drop, and this takes some of the pain out of it,” says Leresche, who doesn’t plan on withdrawing her investments until she retires. “I try to remind myself that gains or losses aren’t realized until you sell.”
The optimist: “A lot of people found out during the pandemic that their secure jobs weren’t so secure,” Schaffer says. “I feel like the nursing world is very secure and there are so many jobs available in general. That’s one encouraging thing. We haven’t before seen high job demand and high inflation at the same time.”
Super saver stat
Only one-third made changes to their retirement accounts this past year because of market volatility—mostly adjusting their investments to align with their risk tolerance.
No one knows what turns the economy may take next, but being prepared with emergency accounts, long-term savings, and a bit of know-how can offer super savers—or just about anyone—the confidence of more financial security.
It’s the sixth year of the Principal® super saver survey. Since 2017, we’ve watched as these extraordinary savers have navigated their way through a record-breaking bull market, a global pandemic, market volatility, and now inflation. Explore what they do differently—and what you can learn from them—in our full survey results (PDF).