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The Principal Enhances Support for Participants Nearing Retirement

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According to a recent survey by the Principal Financial Group(R), only a third of its pre-retiree participants have created a plan for income in retirement1. To help them navigate that crucial time near and at the moment of retirement, The Principal(R) has consolidated new and existing resources into a retirement transition program that offers an increased level of engagement, education and service for participants age 55 and older.

“We need to make the moment of retirement a big deal,” said Jerry Patterson, senior vice president of retirement and investor services at The Principal. “But it’s not a time to feel guilty about what you could or should have done. It’s a time to ensure you’ve done everything you can to minimize the unexpected once your paycheck turns off.”

Prior to launching the enhanced program, The Principal conducted a survey of its retirement plan participants age 55 and older, as well as a series of focus groups with non-customers, to understand pre-retirees’ expectations of the transition from work to retirement. When asked whether they saw the moment of retirement as a financial change, many believed it would be a smooth transition despite the fact that most would experience a significant drop in monthly income.

“While I love the optimism about the road ahead-it’s a powerful reflection of our determined nature and sustainability as humans-we need to recognize that the moment of retirement is financially huge,” Patterson said. “Longer life expectancies, retiring with higher levels of debt and increasing health care costs require us to rethink portfolio construction because unlike the savings years, there’s less time to recover from poor financial decisions.”

The survey found that 62 percent of pre-retirees had less than $500,000 saved for retirement, yet 59 percent had a goal of saving at least $500,000 prior to the day they retire. Nearly 40 percent were unsure or didn’t plan to change their investment risk in retirement. And when it comes to expected income in retirement, 34 percent of pre-retirees believe 50 percent or more of that income will come from Social Security.

Program Features
The primary goals of the program are to build certainty and reduce stress among participants as they make their transition to and through retirement. Program features include:

  • Automatic membership: retirement plan participants begin receiving targeted education and support at age 55 and remain in the program to and through retirement
  • Right information at the right time: program members receive informative and actionable communications on a consistent schedule, including a quarterly program newsletter and annual planning reminders on topics like savings, Social Security, Medicare, retirement budgeting and income options
  • Personalized planning: emphasis on working with a financial professional to create a personalized retirement income strategy based on specific needs and objectives such as risk tolerance, desired lifestyle in retirement and anticipated length of retirement

The retirement transition program is a component of Principal(R) PlanWorks, a new approach to workplace retirement readiness that includes a platform of capabilities and services designed to help make retirement plans work better for both participants and plan sponsors. PlanWorks is made up of three key pieces-plan design, participant experience and strategic measures-to help drive successful retirement outcomes.

“As we zig and zag through life, the day we retire may be the biggest zig of all,” said Patterson. “With a targeted approach and personalized strategy, we’re helping our participants enter the big zig of retirement with confidence.”

For more research, analysis and insights from The Principal(R), visit The Principal Knowledge Center and connect with us on Twitter.

About the Principal Financial Group
The Principal Financial Group(R) (The Principal(R))2 is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500(R), the Principal Financial Group has $519.3 billion in assets under management3 and serves some 19.7 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit

1 Principal Financial Group Pre-Retiree Participant Survey, November 2014.

2 “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

3 As of Dec. 31, 2014.

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