When it comes to retirement, many Americans remain financially unprepared. According to the Economic Policy Institute, the median retirement savings balance for the typical working age family is $5,000. The median savings for 32-to-37-year-olds is just $480.

There is one group, however, that may be winning at the retirement savings game. A distinct set of Millennial super savers is making serious financial sacrifices to pad their retirement accounts. The question is, is it worth it? (See: How to Start Saving for Retirement.)

How Some Millennials Are Saving

A recent survey from Principal Financial Group looked closely at the financial habits of millennial savers who are saving 90% or more of the annual contribution limit in their 401(k) plans.  A common thread among these super savers is that retirement is their top financial priority. Ninety percent of Millennials included in the survey said it was more important than raising a family.

In terms of how much they’re saving, these Millennials are stashing $16,200 in their 401(k) at the low end, and $18,000 at the high end. So how does that compare to the rest of the saver population in general?

In 2017, the average 401(k) deferral rate was 6.8%, according to the latest edition of Vanguard’s annual How America Saves report. Assuming a median household income of $56,516, that means that the typical saver would have a 401(k) contribution of $3,843. The Millennials who are making a push to max out their plans are saving roughly five to six times that amount.

To make those contributions, Millennials are making trade-offs in other areas. According to Principal Financial Group, 47% of super savers driver older cars so they can funnel more money into their retirement accounts. Eighteen percent of Millennials opt to continue renting, versus buying a home, and 42% don’t travel as often as they’d like so they can save more. They’re also willing to go the extra mile professionally, with 40% putting up with work-related stress and 27% eschewing time with friends and family so they get in more hours on the job. (See: Top Retirement Hack? Start with a Lifestyle Change.)

What Are Those Sacrifices Worth?

Determining whether it makes sense to defer buying a home, skip vacations or drive an older car is ultimately a numbers game. Assume that a 30-year-old female saver is contributing $16,200 to her 401(k) annually, with a 100% employer match of the first 6% saved. If that employee earns a 6% annual rate of return, she could retire at age 65 with more than $2.2 million in savings. If she contributes the full $18,500 allowed by the Internal Revenue Service, that figure would grow to more than $2.4 million.

Using the median household income of $56,516 and a 6.8% contribution rate, the same 30-year-old would end up with around $800,000 in savings instead, assuming a 6% annual return. That’s still a decent amount of money but it’s a far cry from what the super savers are set to accumulate.

How can you be a super saver if you’re not able to fully max out your plan, or you don’t have access to a 401(k) at work?

If you do have a 401(k), you can start by reevaluating your current contribution amount. At the very least, you should be contributing enough to get the company match. If you’re not, increasing your deferrals should be a priority so you’re not missing out on free money.

From there, evaluate your budget to see if you can reduce or eliminate some of your expenses. When you can cut things out of your budget, you lower the amount of money you need to live on. That’s money that you could use to increase your 401(k) contributions. Diverting your annual raise to your 401(k) is another option if you’ve already trimmed your budget as much as possible.

If your plan has an auto-escalation feature, that’s another way to build your savings relatively painlessly. A recent analysis from Fidelity Investments saw 401(k) balances reach an all-time high of $95,500. Among the 27% of workers who increased their savings rate over the previous 12 months, 50% of those did so using auto-escalation. (See: 401(k) Balances Reach Record Highs.)

Saving in an individual retirement account is another option if you don’t have a 401(k). The annual contribution limit for IRAs is lower than a 401(k), at $5,500 for 2018, but that could still add up over time if you’re saving the maximum amount. Remember, a traditional IRA offers a deduction on contributions, while a Roth IRA allows you to make tax-free withdrawals after you've retired. If you expect to be earning more later in life, tax-free withdrawals could yield more tax benefits than a deduction on contributions.

The Bottom Line

Being a super saver may not be realistic for everyone. It’s possible, however, to build a sound retirement strategy even when you’re not maxing out an employer’s retirement plan. Saving as much as your budget will allow, getting an early start and tucking money away consistently are all important steps for reaching your retirement goals.