Here's how to become a 'super saver' for retirement

A retirement savings crisis looms for people whose 401(k) plans and other retirement balances are woefully short of what they need to live on.

But some workers – called “super savers” – are successfully growing their retirement nest eggs.

Super savers are employees who save more than 10% of their salary for their pension plans new research from Transamerica Center for Retirement Studies and Transamerica Institute.

According to Transamerica, more than half of employees – 56% – save 10% or less.

Yet the rest, 44%, have reached super saver status, with 15% spending 11% to 15% of their annual salary on retirement. Meanwhile, 29% contribute more than 15%. The company asked respondents to share what percentage of their salaries they contributed, telling CNBC that it is not clear whether respondents included company contributions in their response.

The company surveyed more than 5,700 U.S. employees in 2023.

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Super savers can be of any age. Notably, the youngest cohort – Generation Z – has the most super savers, at 53%, followed by millennials and baby boomers, each at 44%, and Generation X, at 40%.

But building up large pension balances takes time.

“I always tell people there are no microwave millionaires,” says Ted Jenkin, a certified financial planner and the CEO and founder of oXYGen Financiala financial advisory and asset management firm based in Atlanta.

Reaching $1 million in a 401(k) often requires a high contribution rate that lasts for many years, says Jenkin, a member of the CNBC Financial Advisor Council.

Currently, 401(k) savers can usually contribute up to $23,000 this year, or $30,500 if they are 50 or older. (High earners may be able to set aside even more, if their retirement plan allows it.)

New research from Vanguard shows that 14% of the company's defined contribution customers will have reached these maximums by 2023. These savers generally had higher incomes. More than half of participants – 53% – with incomes above $150,000 contributed the maximum.

Those who reached the limits also tended to be older: According to Vanguard, 1 in 6 participants over age 65 reached the maximum savings threshold.

According to Vanguard, maximum retirement savers also tend to work longer with their employers and have a higher account balance. Nearly half (45%) of these participants had an account balance of more than $250,000.

Savers who have $250,000 or more are likely to be older, according to Transamerica's research: 44% of baby boomers have reached that savings level, followed by 33% of Gen Xers, 24% of millennials and 16% of Gen Zers ers.

A smaller share of savers had reached the $1 million mark – including 16% of baby boomers, 9% of Gen Xers, 4% of Millennials and 4% of Gen Zers.

Because the survey asked about total household retirement savings, savers who say they've reached that threshold can also take into account balances built up by someone else, noted Catherine Collinson, founder and CEO of the nonprofit Transamerica Institute and its Transamerica Center for Retirement Studies division.

Experts say this is generally best for becoming a super saver Focus on your savings rate instead of your account balances.

About 60% of employees with automatic enrollment plans are enrolled at deferral rates of 4% or higher, according to Vanguard. Automatic annual savings increases help make that percentage higher.

But it takes time for employees to reach the optimal target of 15%. Often, the knowledge that we should aim for those interest savings – and more – comes informally through word of mouth.

“If they have a financial mentor, a family member or a friend who has taught them the importance of saving, that also has a huge impact on their focus on saving,” Collinson said.

Having an example can also help those individuals better manage other aspects of their financial lives, such as budgeting, spending, increasing their earning potential or seeking higher-paying jobs or careers, Collinson said.

Optimally, 401(k) savers should aim to increase their savings rate by 1% per year until they reach that goal, Jenkin said.

The biggest rule Jenkin says he emphasizes with clients is what he calls the rule of thirds. Typically, when you get a raise or bonus, a third goes toward taxes, while a third should go toward growing your savings and investments and the remaining one-third toward fun, he said.

“That's your chance to not let lifestyle inflation get in the way,” Jenkin said. “Otherwise the money will fall into a black hole.”