It's the rare worker who maxes out his retirement account contributions — and those savings don't come without trade-offs.
"Super savers" — Americans who are putting aside at least 90 percent of the annual $18,000 employee contribution limit to their 401(k) plan — often choose to give up purchases or delay other goals to hit that savings total, according to a new report from Principal Financial. In late 2016, the firm surveyed 2,424 retirement plan participants ages 23 to 51. All had reached super saver status in 2015, and 95 percent were on track to repeat the feat in 2016.
"We saw a lot of folks making big sacrifices today that hopefully pay off tomorrow," said Jerry Patterson, senior vice president of retirement and income solutions with Principal.
Just 10 percent of employees set aside enough to hit the employee contribution limit during 2016, down from 13 percent who did the year before, according to Vanguard's "How America Saves 2017" report, released earlier this summer. Those who max out tend to be older and/or wealthier. (See a demographic breakdown below.)
In Principal's report, some of the trade-offs super savers report making to meet their retirement goals include driving an older car (47 percent), owning a modest home (45 percent) and traveling less (42 percent).
"These are material steps, they're not dramatic steps," Patterson said. "It's pretty practical stuff."
Want to join their ranks? Part of what helps is that super savers often don't see those trade-offs as sacrifices, said certified financial planner Rita Cheng, chief executive officer for Blue Ocean Wealth in Gaithersburg, Maryland. They have a different perspective.
"They don't think of it as you're giving up getting a new car, but that you're gaining more money to use for yourself," she said.
A budget review can help you find trade-offs you're willing to make. It also helps to have well-articulated goals for retirement, said certified financial planner Andrea Blackwelder, a co-founder of Wisdom Wealth Strategies in Denver.
"Create a clear vision of priorities for today and down the road, so you're not making short-term decisions with long-term repercussions," she said.
That can help you figure out how much you need to save. It also helps make sure you aren't unnecessarily forgoing other goals or purchases, or making trade-offs that can have consequences for your health or happiness — like less time with family or added work stress.
"Make sure those sacrifices aren't so great that it's having a disproportionate effect," said Patterson. "At some point, you have to smell the roses along the way."