The popularity of the Marvel Universe movies (now at 23 films and counting) testifies to the public’s ongoing fascination with superheroes and superpowers. It’s fun to watch the forces of evil get their “just deserts” as a result of a hero’s high-tech metal suit or use of a mythological hammer.

All that happens in a fantasy universe, of course. But in the real world of everyday human existence, there exists a kind of financial superpower: the rare ability to save/invest an outsized portion of one’s income — specifically, 20% or more (as defined by a recent study from TD Ameritrade). That’s at least two-and-half times greater than the national 7.9% “personal savings rate” (which includes retirement investing) calculated by the U.S. Bureau of Economic Analysis.

Being a “super saver” won’t help protect the Earth against evil aliens, of course. Still, substantial savings (and that includes retirement investments) can guard against personal financial disaster and help meet long-term goals.

Unfortunately, many households don’t save adequately. A recent “Report on the Economic Well-Being of U.S. Households” issued by the Federal Reserve noted that nearly 40% of adults wouldn’t have adequate cash on hand to cover a $400 emergency expense.

The “super saver” profile

So who are these “super savers” and how are they able to set aside so much more than everyone else? What can we learn from them? (We should point out that we’re certainly not encouraging hoarding, but only a healthy level saving to meet future needs.)

To identify “super savers,” and to figure out how their spending and lifestyle patterns differ from others, brokerage firm TD Ameritrade hired The Harris Poll in late 2018 to survey about 1,500 people aged 45 and older who had amassed at least $250,000 in investable assets. (In other words, the survey group wasn’t a cross-section of the general population. It consisted of people reasonably well off.) Of the total group in The Harris Poll survey, 1 in 5 met the profile of “super savers” — i.e., saving/investing 20% of their after-tax income.

Among the TDA/Harris Poll findings: As a percentage of income, super savers spent less than non-super savers in nearly every spending category, with the most substantial differences showing up in two categories: housing (14% of income vs. 23%) and “essential household expenses” — such as groceries and clothing — (16% vs. 21%). Super savers also spent somewhat less than non-super savers on “discretionary expenses” (9% to 11%), transportation costs (8% to 11%), and utilities (7% to 10%).

Put another way, super savers kept their housing, food, and clothing costs low, while also spending marginally less in other areas. These “spend less” patterns freed up money to put toward savings and investments, allowing super savers to accumulate significantly more than non-super savers.

The study’s findings also documented that super savers were more likely than other respondents to “stick to a budget” and “avoid high-interest debt.” Super savers also were more likely to contribute to both an individual retirement account (IRA) and an employer-sponsored account retirement plan (such as a 401(k) or 403(b)).

SMI “super savers”

The findings from the TD Ameritrade/Harris Poll study seem to be borne out by super savers among SMI’s readership. We recently asked SMI members who save/invest more than 20% of their after-tax income to get in touch with us so that we could ask about their spending-and-lifestyle patterns. We received more responses than we can include here, but below is a sample of what they told us. (To respect the privacy of our respondents, we’re using first names only.)

  • Michael told us he and his wife became super savers early — at around age 30. They are now in their mid-50s. “We have always lived on a spending plan, and we made the decision to move from two incomes to one when our children were small,” Michael said. Even as his salary increased over the years, the family didn’t expand their lifestyle. Today, their mortgage is paid in full, and they’re making large contributions to their retirement savings. “Our net worth has been built systematically in 401(k)s and Roth IRAs,” he noted. Despite their overall frugal approach to lifestyle, they don’t scrimp in every area. “We take at least one large family vacation and send our children to summer church camp, so there are significant expenditures on making memories and participating in meaningful activities,” Michael said.
     
  • George didn’t move into the super saver category until he and his wife became empty nesters. Now, they’re saving aggressively. “Our budget is based on maxing out our 401(k)/403(b) accounts, including the extra contributions allowed for people 50 and over. We also max out Roth IRAs and saving in taxable CDs.” One thing that’s making those savings levels possible is a modest lifestyle. “We drive our vehicles until the wheels fall off, and then we glue them back on,” George joked. “Most of our vacations are low-cost camping or backpacking trips, and we eat out only about once a week.”
     
  • Emily and her husband got started early. “My husband and I were married in college, and we started saving intentionally when he got his first job (we wanted to take full advantage of his employer’s 401(k) match). We ramped up our saving a little bit every year, and probably hit the super-saver 20% mark between the ages of 25-30.” Right now, Emily and her husband aren’t contributing to IRAs or education accounts. They’re still young, so they’re concentrating on emergency savings and a “new-used car fund.” They also try to maintain a surplus that allows them to “give generously when there’s a need.” To live frugally, they purchased a modest house, and they buy clothing for their six (adopted) children at thrift stores and consignment shops. “To us, it’s worth living below our means in the hope of living in extreme freedom and generosity in the future,” Emily said.
     
  • Tyler (age 35) told us the nature of his job made it possible to move farther away from the expensive metropolitan area where they had been living. He and his family relocated to a less-populated part of their state, allowing them to buy more house for less money. They also save substantially on annual property taxes. His single-income family of four saves on food costs by “cooking all our meals at home, and, when traveling, we usually pack a lot of our own food.” These lifestyle cost-savings have enabled Tyler to save/invest well over 20% of net income and also to accelerate the payment on the family’s home mortgage.
     
  • Henry and his wife, now in their 60s, moved into super-saver mode just a couple of years ago when they finished paying off their mortgage. Now, they’re putting about 5% of their income into taxable savings and about 30% into retirement savings. Like our other respondents, keeping expenses low is the key. “We live in a fairly modest house, drive economical vehicles that we keep for a long time, and we live on a budget. We are intentional in our spending.”
     
  • Margaret is in her mid-30s and is single. She started consistently saving 20% of her income when she was 27. “Because I save, I was able to buy my own home (in an expensive city, no less). I am also able to give to someone in need without having to worry about if that will affect paying my mortgage. And I’m able to travel to Europe about once a year, something I really enjoy. ” It’s worth noting that she approaches her traveling with a frugal mindset. “I typically travel with my sister, and we stay at hiking hostels, convents, or guest houses. We also eat a lot of picnics as opposed to eating out when we travel.” Margaret says being frugal requires a lot of “conscious choices,” such as “cooking from scratch, buying clothes at thrift stores, going to the cheap grocery store, and taking public transportation rather than owning a car. They all increase the volume of money I can put away.”
     
  • Jim and his wife bought a modest house in 1985 and paid it off in 1994. They still live there. “With no house payment, our ‘super savings’ took off.” Today, they put about 20% of the income from both their salaries in retirement accounts and save a bit more in taxable accounts. Along the way, Jim and his wife were able to put their children through college and even provided “matching” money to help their children (when teenagers) launch retirement accounts of their own.
     
  • Jennifer told us that she and her husband were able to become super savers by “minimizing debt” and “driving old cars.” And even though her husband has been unemployed several times over the years, “we have never been in financial trouble.” Jennifer also noted that she and her husband are not only super savers, but they also try to increase their amount of giving each year. “That keeps us humble. If we save, only to hoard it for ourselves, that is not what the Lord has called us to.”

The common denominator

Our super-saver respondents have a variety of situations: married and single, single-income and dual-income, young couples with children at home and older empty nesters, some who started “super saving” early and others who started much later. The common denominator is that all have found ways to keep their ongoing costs low, especially in the area of housing. By living modestly and frugally, they’re able to save at a high level.

Several of our respondents also stressed that their low-cost lifestyles enable them to give generously and to have enough money to spend on vacations and other family experiences that create fond memories.

That’s really super and powerful.