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Face-to-Face Education Drives Better Retirement Savings Behavior

Personalized one-on-one meetings spur actions that can boost retirement income

July 11, 2012 (Des Moines, Iowa) – When it comes to boosting retirement savings—and ultimately retirement income—good old fashioned face-to-face education is proving to make a significant difference.

According to a new analysis from the Principal Financial Group®, employees who attend personalized, one-on-one sessions at the worksite take more positive actions including participating more and saving more.

Analysis shows that, over time, the higher deferral rate combined with the commitment to increase savings among those who attended one-on-one meetings could mean an additional $242,000 at retirement—based solely on employee deferrals. That could translate into an extra $905 more a month in retirement income[1], which is 69 percent higher than participants who didn’t have one-on-one education.

Graph demonstrates an increase in retirement savings for personally-educated employees vs. generally-educated employees

“We know from face-to-face educational meetings that retirement savers benefit from hearing a person explain how the retirement plan works rather than having to shuffle through documents by themselves,” said Barrie Christman, vice president, individual investor services at The Principal®. “Take it a step further with personalized one-on-one meetings on company time and significantly higher numbers of participants are taking actions that can help get them to the 11-15 percent contribution range—including employer match—that we believe is needed over the course of a career to have sufficient retirement income.”

One-on-one adds up to greater savings

The analysis of participants covered by retirement plans[2] through The Principal, who attended a one-on-one meeting in 2011, found that 92 percent agreed to take a positive action and 80 percent completed the action. The top actions were to increase savings rates now and commit to continue to increase them in the future:

  • On average, deferral rates were nine percent higher among one-on-one participants compared to those who attended a group educational meeting.
  • Nearly ten times as many one-on-one participants (19 percent) chose to automatically increase their retirement plan contribution compared to only two percent of participants who participated in a group educational meeting.
  • On average, one-on-one participants chose to increase their contributions by one percent each year for an average of five years.

“Even a small increase in savings can make a big difference in retirement security over time, especially when there is a commitment to keep increasing contributions,” said Christman. “While plan design—automatic savings features, higher default rates and employer match—plays a critical role in empowering participants to save effectively, face-to-face education is a key tool in the retirement readiness toolbox.”

The Principal rolled out its unique program of one-on-one meetings at the worksite in 2006. The salaried professionals have conducted more than 340,000 individual meetings since then.

The personalized meetings identify gaps in retirement planning, show how employer-sponsored benefits fit with personal financial needs and help individuals develop a personalized action plan.

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About the Principal Financial Group

The Principal Financial Group® (The Principal®)[3] is a global investment management leader including 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®, the Principal Financial Group has $364.1 billion[4] in assets under management and serves some 17.3 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


Calculation performed by Principal Financial Group based on the following assumptions: 30-year savings period from age 35 – 65; Starting salary: $35,000; 3.5% wage growth; 7% annual return; withdrawal rate: 4.5% over 30 years. The assumed rate of return is hypothetical and does not guarantee any future returns or represent the return of any particular investment option. This calculation is for illustrative purposes only.
401(k) or 403(b) defined contribution plans.
“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, 2012.

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