Principal defines these Super Savers as people saving either 90% of the maximum in their retirement plan — such as a 401(k)–or at least 15% of their income. According to Principal’s survey of nearly 1,500 individuals, Super Savers account for 49% of Generation X and 43% of millennials.
This is contrary to the meme that younger generations are spending all their money on traveling the world.
Of course, some may be saving large amounts to travel in future years, and perhaps they are not saving for retirement.
Then again, there is a view that many college educated, well paid workers are over saving for retirement. I now agree with that view.
I grew up the child of parents that grew up during The Great Depression. I was taught – literally hammered in to me – to save as much as possible, always, and to avoid or postpone spending on fun things. I had my first job at age 10 and was directed to save at least 50% for college (in fact, I paid 100% of my own college tuition and my two Masters degrees without loans).
The good news is I over saved for retirement and so can be comfortable in retirement.
The bad news? I never did a lot of things my peer groups did, and which would be much easier to do when younger. Over saving is a real issue and it can have unexpected consequences – such as it might negatively impact one’s career.
For example, when I looked into it, I was startled to see how many people have traveled internationally (unlike me, who has not):
- 60% of American’s have traveled internationally (includes Canada and Mexico).
- Over 50% have a current passport (the 60% figure above includes people who traveled earlier in life)
- 42% of Americans traveled to at least one international destination in 2018 (includes Canada and Mexico but excludes day trips across the border). 3x more Americans visit Mexico than Canada.
- 50% of Americans have traveled to at least one of their ancestral countries.
- 1 in 4 U.S. families with children will travel internationally each year.
- In 2018, 1.4 billion people in the world traveled to at least one other country that was not their own country.
- Over 50% of students at a University I attended will study abroad, and another 25% will do a summer program.
- The very ordinary middle school I attended decades ago offers a “travel study” program in Spain and France – for middle school students!
One of my grandparents spoke Norwegian (from Norway), another spoke German (from Switzerland). My next door neighbor, growing up, was from Germany. At my last house, my next door neighbor was Dutch.
But I was too focused on saving every penny to notice the importance of a global view and of international travel, whether for study, business or leisure.
I now see many people over save and by doing so, forego important life experiences.
How important? 100% of my colleagues who went further up the business ladder than I had international experience, whether through study abroad in high school or college, work abroad, or because they immigrated from another country or traveled extensively.
Consequently, some things we forego by over saving might have unintended side effects – like in this example, career opportunities.
Afterword – I planned to start traveling in early 2020. Well, that didn’t work out! All my trips were canceled. At this point it will be 2022 or 2023 before I re-start any travel plans.