Skip navigation.
Go to the Principal Financial Group(R) home page
Secure  Account Login

Select login type:


Top 9 financial planning tips

Feel more in control of your financial future with these planning strategies.

Use these 9 tips to help keep your finances on track.

1. Remain true to your financial plan.

Staying focused on your long-term financial goals is critical to helping you meet those goals. Build a plan that you can stick with, reviewing your plan along the way to be sure it continues to meet your needs.

2. Timing the market may not be in your best interest.

The stock market has historically experienced short bursts of movement, both up and down. Investors who attempt to time the market — selling or buying stock in anticipation of a market plunge or rise — generally lose. In fact, a 2010 study by Morningstar concluded that over the past decade, investors who tried to time the market had significantly smaller retirement savings than individuals who followed a buy-and-hold strategy.[1]

3. Tailor your investment choices.

Make sure the investment options you elect are aligned with your goals and risk tolerance.

"When your asset allocation is in sync with your long-term objectives, time horizon and risk tolerance, you may be more likely to reach your goals," says Glen Young, director of retirement planning at Ashton Young, Inc. in Troy, Mich.

4. Keep your emotions in check.

Investment decisions driven by emotion are rarely profitable. Investing the same amount regularly — a strategy called "dollar cost averaging" — may be an effective way to gauge market risk.[2]

5. Maintain "emergency" funds.

Consider keeping at least three to six months of living expenses in savings or money market accounts to pay for unexpected expenses. That way, you may avoid incurring new credit card debt or tapping into tax-deferred accounts.

6. Increase your contributions.

While the financial markets may have eroded the value of retirement accounts in recent years, you can still build a more secure future. This year, look for ways to increase retirement contributions and pay down debt to free up money for additional saving opportunities.

7. Know your risk tolerance and invest accordingly.

While it might be tempting to stick with so-called "safe," or lower risk investment options, maintaining a healthy exposure to investments with higher risk/reward potential can be a critical component within your asset allocation, and may help you to meet your retirement goals. Know your risk tolerance and consider taking some risks within your asset allocation.[3]

8. Know that investing involves risk.

Understanding that some risk is generally necessary to help achieve your goals can help you navigate the market's peaks and troughs. Staying well diversified across various asset classes may help balance risk versus return.

"Generating investment growth means accepting some level of market volatility," Young says. "Be sure you are taking on only enough risk to meet your goals."[2]

9. Review your plan regularly.

Market movements — both positive and negative — may alter your financial strategies. Review your portfolio at least annually or as significant events occur, and adjust strategies as necessary to help keep your plan on track. To see if your plan for retirement continues to support your goals, log in to the retirement account.

Consider your goals and what your expenses may be in retirement.

Here's something to keep in mind: In a recent survey, the median response among financial professionals indicated that individuals need to save approximately 15 percent of their pay, including their organization's contributions (if applicable), to have enough income during retirement, assuming they begin saving for retirement early in their career.[4]

Need help getting there?

Use our interactive retirement planning tool. It can help point out potential shortfalls and suggest possible solutions to close them.


Source:, February 2010
Dollar-cost averaging involves continuous investing. Investors need to consider their ability and willingness to continue investing through periods of low price levels. This does not assure a profit nor protect against loss in declining markets.
Asset allocation does not guarantee a profit or protect against a loss. There is no guarantee an asset allocation investment option will provide adequate income at or through retirement.
America Rebuilds Research with Financial Advisors, June 2011, conducted by Harris Interactive on behalf of the Principal Financial Group®. When looking at all responses in the survey, the median is the middle of the responses given.
Retirement professionals are sales representatives of the members of the Principal Financial Group. They do not represent, offer, or compare products and services of other financial service organizations.

Glen Young and Ashton Young, Inc., are not affiliated with the Principal Financial Group or any of its member companies.

Insurance products and plan administrative services are provided by Principal Life Insurance Company. Securities are offered through Princor Financial Services Corporation, 1-800-547-7754, 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® (The Principal®), Des Moines, IA 50392.

While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that none of the member companies of The Principal are rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.


Have a question? Call us at 1.800.986.3343

Copyright © , Principal Financial Services, Inc.
Disclosures and Terms of Use | Products and Services Disclosures | Privacy and Security
Securities offered through Princor Financial Services Corporation, member SIPC