5 things you can do to help beef up your retirement fund

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Travis Hunt, a commercial territory manager from Kansas City, Missouri, drives a 2009 Ford Mustang. He whips up oven-baked salmon with roasted brussels sprouts and brown rice for dinner to save some cash instead of checking out the latest eatery. At age 29, he doesn’t own a home — yet. But he could still afford to splurge on any of those expenses.

So, where does he spend his extra income? He invests in his future traveling, philanthropic self by contributing 20% of his paycheck to his retirement accounts.

Hunt was among nearly 1,500 Gen X and millennial ‘super savers’ — those who deferred 90% or more of the IRS maximum ($16,500-$18,000) to their retirement account in 2017 — surveyed by Principal^® about their retirement savings habits.¹

While many people think all millennials are out posting Instagram pics of avocado toast at Sunday brunch and racking up debt one Venmo exchange at a time (the clichés go on and on) — Principal^® found many forward thinkers making sacrifices now in hopes to become financially independent and have a good life during retirement.

"Saving for retirement never starts soon enough," says James Hernandez, a 48-year-old production carpenter in Burbank, California, who started contributing to his 401(k) account at age 18. "And it can build quicker than you think."

You can be a super saver, too.

"Being a ‘super saver’ doesn’t mean you have to be miserable," says Jerry Patterson, senior vice president of retirement at Principal. In fact, 70% of these savvy savers don’t have a formal budget. "Plenty love Netflix, Hulu, and go on trips. The key to their success: practical, common-sense sacrifices and decisions."

See which thrifty tips can work for you.

1. Make room for what’s important to you.

Assess your priorities. What brings you joy? For Lucy Hancock, 29, an international student and scholar services coordinator in Omaha, Nebraska, it’s experiences.

"I don’t have cable. I thrift shop. I never buy full price," she says. Instead, she splurges on travel — she’s visited 10 countries, taught English in India, and worked odd jobs in Australia — and socializing with friends. A decade from now, Hancock expects to "look back and be happy I did those things," she says.

Try this: "Figure out what is a priority that you can’t pass up. What could you cut and not feel the loss of it? You can be mindful without letting it control your life," she says.

2. Figure out where your money is going.

You don’t have to have a formal budget to track your spending. But you do need to monitor spending habits. "A $10 swipe multiple times adds up to $50 pretty quick," says Hunt. He uses a digital version of the envelope system (tucking away cash based on your budget categories) through the app Goodbudget. Other ‘super savers’ use budget apps like Mint, create spreadsheets, or simply do mental math.

Try this: Test a few systems and find one that sticks.

3. Go automatic with your retirement contributions.

When starting out, Hancock focused on saving just 1% of her paycheck above her employer’s suggested amount (Patterson recommends starting with 6% to 10% and bumping up 1% a year). Now, she’s shifted her goal — an automatic annual increase until her 401(k) contributions reach 20%. "You don’t notice the difference each year," she says. "It becomes your new normal."

Try this: When you start a new job, get a promotion, or go through any kind of financial transition, boost your contribution before you even see the extra money. That way, you’ll never know what it was like to have that extra cash every paycheck.

4. Trim debts — while still saving.

"I prioritized paying any immediate debt," Hancock says. "When I started out, I was not putting 13% to 15% into my 401(k)." But she was contributing 1% more than the amount to get the full company match. When debts were paid off, she didn’t let herself see that extra money — it went straight toward retirement.

Try this: Balance paying the highest interest debt while still saving for retirement.

5. Get savvy — even with your splurges.

Even though Hunt and his fiancé take several long weekend vacations a year, they exercise due diligence — scouring the internet for deals and using credit-card points and perks to snag discounts. They also make sure to pay their credit cards off in full each month. "Our biggest perk in the past two years is the Southwest Companion Pass through credit-card points. We only pay for one ticket for the two of us to fly," he says.

Try this: Find ways to save cash on splurges through credit-card points, loyalty programs, comparison shopping, or other strategies.

Bottom line: Just start saving.

Even if you didn’t begin saving for retirement away right away, it’s not too late. "Start putting money away while you still have some time left," Hernandez says. "Something is better than nothing at all."

Next steps: Evaluate where you’re at with the Retirement Wellness Planner by Principal. Could you contribute more to your 401(k)?

This post was created by Principal with Insider Studios.

^{1 Methodology: The Super Saver survey was conducted by Principal between October 19 and November 10, 2017 with 1,498 respondents to the survey.}

^{A survey was sent to Millennial and Gen X participants who work for a company that has Principal as the recordkeeper for their retirement account and have reached the IRA max for retirement contributions or who have saved 90% of the IRS max allowed under a retirement plan. There were 1,498 responses to the survey. For this research study Millennials (Gen Y) are individuals born in 1978 – 1995. Gen X are individuals born in 1965 – 1977.}

^{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.}

^{Insurance products and plan administrative services provided through Principal Life Insurance Co., a member of the Principal Financial Group®, Des Moines, IA 50392.}

^{Principal, Principal and symbol design and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.}