Surprising Share of Americans Investing in Designer Bags for Retirement

About 10% of Americans say their best chance of financing retirement may come from either winning the lottery or investing in luxury handbags, according to a new survey by TIAA. It sounds like a neat statement — until you realize the gut power behind it.

If you dig into the data in this and other recent surveys, you’ll find that the finances facing many Americans look bleak. Nearly two-thirds of Americans believe that retiring “on time” is a fantasy, 30% are not confident they will be able to cover basic expenses as they age, and one in five are not saving for retirement at all.

What TIAA Really Says

The TIAA survey highlights the sense of hopelessness shaping the way Americans approach retirement today. A Goldman Sachs study last week showed how impossible the system now is for many savers: 40% of working Americans say they live paycheck to paycheck, and nearly three-quarters of those say day-to-day costs make saving for retirement nearly impossible.

Even the highest earners aren’t immune — about four in 10 people earning more than $300,000 say they’re still living paycheck to paycheck, thanks to rising debt and lifestyle creep that’s eroding savings. Add to that what Goldman Sachs calls the “financial vortex” of the mid-2010s economy — a gluttony of housing, health care, and caregiving that is gobbling up record shares of income — and the dream of a stable retirement begins to look like more of a luxury than a handbag made of Togolese leather by an artisan in France.

“It’s clear that Americans want peace of mind in retirement, but the reality is that many people either don’t save enough or aren’t confident in their ability to plan,” TIAA’s Courtney Gibson said in a statement.

Only certain portfolios outperform the S&P 500

As investment ideas go, betting your future on a particular luxury good isn’t the worst thing you can get from TikTok. Some luxury handbags, especially the Hermès Birkin and Hermès Kelly, have outpaced the stock market for entire decades. One analysis found that its value rose about 14% annually between 1980 and 2015, faster than the average return of the S&P 500 (which broadly represents how the stock market performs) over the same period.

However, not all bags are performers. Although handbags were the best-performing holdings in the Knight Frank Luxury Investment Index in 2024, they only gained 2.8%. This did not keep pace with the inflation rate that year, which reached 2.9%. Investing in a broad-based S&P 500 index fund would have earned you more than eight times the gain, 23.3%.

Because even if you win the “Hermès game” — the arcane, almost mythical process whereby only select customers with long purchasing histories are offered the chance to purchase a coveted bag — you still have to be right about which style, size, material and color will earn value.

For example, the Hermès Sellier Birkin bag emerged as the “breakout investment piece” of 2024, according to a report by ReBag, with a value retention of 250%. This means that a Sellier Birkin purchased at retail price can be resold for 2.5 times its original price. But resale prices vary, right down to the viral knockoff from Walmart (WMT), which fans have dubbed “Wirkin.”

The broader finding from the TIAA survey is not that some Americans believe handbags can replace savings, but rather that retirement accounts seem so dysfunctional that people are even considering them.

If you can buy a $12,000 handbag and want to tell yourself (or your partner who just saw the receipt) that it’s an “investment,” go ahead — just don’t skip contributing to your 401(k) to do it. Some rare portfolios may appreciate significantly in value, but most won’t outperform a diversified portfolio, and none will send you a guaranteed check every month in retirement.