4 ways to raise super savers
If you have kids in your life, you may wonder if they ever listen to you, especially during those sometimes trying teen years.
Here’s the good news. More than any other factor, super savers1 named their parents as the greatest influence on their savings habits.2 So some of those messages must be sinking in.
Super savers are contributing to their retirement accounts at a high rate, often maxing out their retirement contributions. There’s a lot to learn from them about helping young adults save, especially as they enter the workforce. Here are tips you can use with kids in your life to help them become super savers.
1. Motivate them.
Super savers say it’s never too early to start saving, with 77% having opened a savings account for their children.2 You can also influence positive behavior by being transparent about your own savings habits and talking to kids regularly about how to save.
2. Acknowledge sacrifice.
Prepare kids to set priorities and make some sacrifices so they can save more. Super savers report they save at high rates by:
- Driving older cars
- Taking more affordable vacations
- Owning moderately priced homes2
3. Encourage doing your homework.
A majority of super savers report they learned little about personal finances in school.2 So you can give kids an extra advantage by inspiring them to be curious and do their homework on finances. As they enter the workforce, encourage them to set a meeting with a financial professional. Other great steps are attending seminars or workshops, using online resources, and taking advantage of education from their retirement plan provider.
4. Get them started early.
More than half of super savers started saving for retirement in their 20s2. Of course, the earlier they start, the more they can take advantage of growth over time.
1 Super savers are defined as GenXers and Millennials who are deferring 90% or more of the IRS maximum amount to their 401(k) account.
2 Principal Super Saver Survey, 2018.
The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.
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