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Concern About Financial Future Easing for Many Americans

But retirement savings plans remain underutilized

March 8, 2011 (Des Moines, IA) - Americans report their financial future looks brighter, fueled by a more optimistic economic outlook, according to the latest Principal Financial Well-Being IndexSM.

The number of workers expressing concern about their long-term financial future dropped 11 percentage points from 72 percent in the fourth quarter of 2010 to 61 percent this quarter. Retirees also regained their financial footing, with 43 percent agreeing they are extremely happy about their current financial well-being, up from 36 percent in the previous quarter.

The Principal Financial Well-Being Index, which surveys both American workers at growing businesses with 10 to 1,000 workers and retired Americans[1], is released quarterly by the Principal Financial Group and is conducted by Harris Interactive®.

Despite the economic difficulties of the past two years, more than a quarter (28 percent) of employees and 20 percent of retirees are optimistic regarding their economic outlook for 2011. Nearly half (45 percent) of workers and 57 percent of retirees are cautious. Only 15 percent of workers and 17 percent of retirees indicate they are pessimistic.

“As their confidence in the economy improves, Americans are starting to rekindle their sense of hope and look ahead to long-term possibilities,” said Luke Vandermillen, vice president of retirement and investor services at the Principal Financial Group®. “Now that they’ve moved past the point of simply riding out the storm, Americans are beginning to dream again about their financial future.”

Retirement savings and planning still in the backseat

While nearly half (48 percent) of workers are aware of the amount of money they need to set aside in order to comfortably retire, less than a third (30 percent) believe they are saving enough money to do so. The number of workers who have not yet planned for retirement remains relatively unchanged, at 24 percent, only a 2 percentage point decrease from the previous quarter.

The survey’s results also indicate a significant disparity between workers who use a financial advisor and those who do not: 48 percent of workers who use a financial advisor believe they are saving enough money to retire comfortably, compared to 25 percent who do not use a financial advisor. Similarly, workers who do not use a financial advisor are significantly more likely to indicate they have not yet planned for retirement (28 percent) than workers who do use a financial advisor (11 percent).

“As Americans look to the future, they must remember to stay disciplined when it comes to planning and long-term savings. Without a plan in place, Americans are putting their retirement dreams at risk,” said Vandermillen.“Workers have a number of resources available to help them get started, but our research suggests the best tool may be sitting down with a financial advisor.”

Americans have practical plans for tax breaks

With tax season underway, many Americans plan to put their income tax refunds to long-term use. Of those surveyed who expected to receive a federal or state tax refund, 44 percent of workers and 50 percent of retirees said they plan to save or invest their refund this year. Others say they will use the refund to pay down short-term debt (42 percent of workers and 23 percent of retires).

When asked about their plans for the additional take-home pay they will receive as a result of the reduced Social Security payroll tax in 2011, 30 percent of workers said they will use the extra income to cover daily expenses and 24 percent will use it to increase their savings. Twenty percent of workers will pay down or pay off short-term debt while 14 percent will pay down or pay off longer-term debt. Fifteen percent of workers will increase their retirement savings, either through their employer-sponsored retirement account (8 percent) or another retirement account (7 percent).

See the full report and past results at For more news and insights from The Principal, connect with us on Twitter at:


This Principal Financial Well-Being IndexSM survey was conducted online within the United States by Harris Interactive on behalf of the Principal Financial Group® between January 26th, 2011 and February 4th, 2011 among 1,127 employees and 520 retirees. Results were weighted as needed for age by gender, education, race/ethnicity, region and household income. Propensity score weighting was also used to adjust for respondents’ propensity to be online. No estimates of theoretical sampling error can be calculated; a full methodology is available.

This is one in a series of quarterly studies to identify and track changes in the workplace of small and midsize (growing) businesses. The first Principal Financial Well-Being IndexSM survey was conducted in the United States in 2000.

About the Principal Financial Group

The Principal Financial Group® (The Principal ®)[2] 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 $318.8 billion in assets under management[3] and serves some 19.1 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.

About Harris Interactive

Harris Interactive is one of the world's leading custom market research firms, leveraging research, technology, and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries, including health care, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant, and consumer package goods. Serving clients in more than 215 countries and territories through its North American, European, and Asian offices and a network of independent market research firms, Harris specializes in delivering research solutions that help clients stay ahead of what's next. For more information, please visit

Survey of 1,127 employees and 520 retirees conducted January 26 – February 4, 2011
"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 Dec. 31, 2010.

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