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New Online Resource from The Principal Estimates Time it Might Take to Rebuild 401(k) Account Balance

Estimator is based on EBRI study of more than 21 million participants

July 1, 2009 (Des Moines, IA) — A lot of participants may be asking themselves: how long might it take to rebuild 401(k) balances after the stock market decline in 2008? A new resource from the Principal Financial Group® estimates the time it might take to rebuild 401(k) account balances to January 2008 levels.

The retirement rebuilding estimator is based on analysis by the nonpartisan Employee Benefit Research Institute (EBRI) of more than 21 million 401(k) participants. The study provides an estimate of how long it might take to get retirement savings back to January 1, 2008 levels based on estimated account balances on December 31, 2008.

"Participants in 401(k) plans are eager to get an idea of how long it might take to rebuild retirement accounts," said Luke Vandermillen, vice president of marketing at The Principal®. "Our estimator helps answer that question and provides tips that can help the process."

The retirement rebuilding estimator asks users for three pieces of data:

  • account balance on December 31, 2008
  • total annual contributions (employee and employer combined)
  • anticipated rate of return for the rebuilding period

Users receive an estimated rebuilding time based on an input rate of return for accounts from the study with similar balances and contribution rates — and shows the potential difference increased contributions to an account can make.

"The estimator also serves as a reminder for plan participants to focus on what they can control," said Vandermillen. "Obviously they can't control the market, but they can help the rebuilding time by increasing contributions and ensuring their investment allocations fit their tolerance for risk."

The retirement rebuilding estimator is available to the public at

About the Principal Financial Group

The Principal Financial Group® (The Principal ®)[1] is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $236.6 billion in assets under management[2] and serves some 18.8 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

About EBRI

The Employee Benefit Research Institute (EBRI) is a private, nonprofit research institute based in Washington, D.C., that focuses on health, savings, retirement and economic security issues. EBRI does not lobby and does not take policy positions. The EBRI analysis is published in the February 2009 EBRI Issue Brief, "The Impact of the Recent Financial Crisis on 401(k) Account Balances," online at

Insurance products and plan administrative services are provided by Principal Life Insurance Company. Securities are offered through Princor Financial Services Corporation, 800-247-4123, member SIPC, and/or independent broker/dealers. Securities sold by a Princor Registered Representative are offered through Princor®. Princor and Principal Life are members of the Principal Financial Group, Des Moines, IA 50392

About the study
New research by the nonpartisan Employee Benefits Research Institute (EBRI) recently examined how long it might take for 401(k) accounts to recover what was lost in 2008; this data is presented in our estimator online. Source: EBRI 2009 — Excerpt from February 2009 EBRI Issue Brief,

About the estimator
The analysis produced is based on calculations provided by the Employee Benefit Research Institute (EBRI). Data is based on the actual account balance of all participants in the EBRI/ICI 401(k) database (of more than 21 million participants) as of 12/31/2007 and then projected to 12/31/2008. Overall losses/gains are defined as the difference between actual year-end 2007 and estimated year-end 2008 account balances. Projections include estimated market losses/gains experienced in 2008.

Rebuilding period calculations estimate number of years to bring 90 percent of account balances within the selected range of balance and ongoing contributions to actual 12/31/2007 levels from estimated 12/31/2008 levels based on the rate of return selected by the user of the tool. The tool does not estimate the rebuilding period for user's account. While the 90th percentile is considered a reliable measure in statistics to show potential outcome with a high level of certainty, EBRI's rebuilding projections should not be used to produce individualized estimates; they should rather be used to show estimated rebuilding periods for participants within similar account balances and contribution ranges based on the user-selected investment return. Exact rebuilding period depends on actual asset allocation, specific account balance, actual (and unknown) investment return going forward, total amount of combined employer/employee contributions, and total fees charged to the plan.

Since the future cannot be forecast with any certainty, your financial goals and objectives, personal circumstances, and various laws and market conditions will likely change over time. As a result, the actual results you experience will vary from the hypothetical illustrations contained in this analysis. The member companies of the Principal Financial Group® do not guarantee the accuracy of, or the applicability of, the analysis to your circumstances.

In providing you with future scenarios of the retirement rebuilding estimator, you select an assumed hypothetical rate of return. This assumption is purely hypothetical, is not guaranteed, and the actual outcome will differ from what is shown. No one can predict what the market will do tomorrow or at any time in the future.

For complete information on the data behind the outcomes generated by the estimator, please visit us online at

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"The Principal Financial Group" and "The Principal" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
As of March 31, 2009

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Call 515.246.4907 or see the full Media Relations contact list.

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