Explore Life & Money

Let’s be honest: financial planning can be confusing, stressful, and just plain boring. But when you focus on the kind of life you want—the goals, needs, and dreams you have for yourself and your family—your decisions about money get a lot easier. We’re here to help you explore the financial topics that matter to your life.

Looking for more in-depth guidance? Talk to your advisor to create a financial plan for your specific needs and goals.

  • The U.S. elections are over. What does this mean for your investments?

    Nearly 600 days after the first candidate threw his hat in the ring, the U.S. presidential election is decided. Donald Trump will be the next president. And, as expected, the effects of the electoral outcome are dominating the headlines.

    That’s why we asked our economists to weigh in and answer the question, “What might this mean for markets and investments?”

    The U.S. economy is strong

    Going into Election Day, markets were largely anticipating a Clinton win, so it is no surprise they could be under pressure with the announcement of Trump as the U.S. president-elect, according to our economists.

    While short-term market volatility is likely, Principal chief global economist Bob Baur believes the current strength of the U.S. economy will help prevent any significant market downturn. Additionally, according to Principal senior economist Robin Anderson, if the value of the U.S. dollar declines as a result of Trump’s win, it would  be a net positive for the U.S. economy and export sector.

    Despite the current market noise, Baur encourages people to stick with it and maintain a long-term view until more is known about what a Trump presidency will mean for the U.S. economy.

    A Trump presidency

    Economists will be watching to see how statements made by Trump throughout the campaign manifest into economic policy.

    Global trade and immigration were a significant part of his platform during election season and would have an obvious impact on the economy and markets if his positions turn into policy, Anderson says. For example, she believes that if Trump is able to push through some of the tariffs he proposed during election season, it could open up frontier markets like Vietnam for U.S. companies. 

    What’s an investor to do?

    Listen as Bob Baur, chief global economist, shares his insights on the key takeaways for investors following the election of Donald Trump to White House.

    How does the surprise US election outcome compare to Brexit?

    Global investment strategist Seema Shah breaks down why the surprise outcome of the U.S. presidential election didn’t turn into another Brexit for the markets.

    What will happen to interest rates now?

    Global investment strategist Seema Shah discusses what to expect from Central Bank policy around the world following the U.S. elections.

    More election insight

    Post-Election Day and beyond, our experts are watching the markets and the headlines. Check out their thoughts on considerations for investors.

    Tips for keeping a cool head

    Instinct often causes people to make financial decisions emotionally—not logically. You can rise above those emotions to make smart, measured investment decisions.

  • When interest rates rise: What you need to know

    Man reading educational material about the affect of interest rate changes on his tablet.

    When you hear that interest rates are going up, you probably immediately think about your mortgage or credit card payments. It makes sense: A rate increase could impact your monthly payments. It can also, at least in the short term, make investment markets somewhat volatile—which may leave you with questions about your retirement account.

    Having concerns is completely normal. But market changes are nothing new. Get a better understanding of how they might impact returns, and what you might do to keep your retirement saving goals on track.

    What are interest rates, and why do they change?

    In simple terms, an interest rate is the price of money. For example, the interest you pay on your mortgage is the price you pay your lender to use their money for the length of your mortgage (e.g., 30 years).

    The general level of interest rates in the U.S. is decided by the Federal Reserve (our central bank). The Federal Reserve uses interest rates to help guide employment growth and stabilize the economy.

    For example, if the economy is growing slowly, they may lower interest rates to encourage increased spending and investing. On the other hand, if the economy is growing too quickly and could cause inflation to rise, they might raise rates to cool it down.

    What’s happened in the past when rates have risen?

    Markets are typically more volatile while they absorb the rate increase news. How volatile depends on the size and frequency of the rate increases.

    Keep in mind—the Federal Reserve has consistently stated that any increase in rates will be “gradual” and overall rates will still remain relatively low. 

    How the change in interest rates might affect your retirement account generally depends on the investments you hold. As interest rates go up, bond prices typically go down. And historically, stock prices tend to fluctuate following interest rate changes.1

    However, a retirement plan is generally designed to help meet your long-term retirement and investment goals. So, while changing interest rates may cause volatility in the short-term, the long-term effect on markets has been positive.2

    What can I do? 

    As you review your investment strategy, keep these things in mind as interest rates change:

    1. Timing the market. No one can perfectly predict the market, so timing the market may be unsuccessful and impact your long-term objectives. Moving your savings to less risky investments or taking money out of the market during volatile periods may cause you to miss out on any gains if the value of those investments bounces back.
    2. Staying the course. It’s important to remain focused on your long-term objective, so you don’t make any snap decisions. Choose investments with an acceptable level of risk (based on your preferences and life stage) that reflect your retirement goals. 

    When interest rates change, it can be a lot to take in. Constant chatter in the news about markets can often be more distracting than helpful. Eliminate the noise and go back to basics—remember why you carefully chose the investments you did, and take the retirement saving path that’s right for you. 

    December rate hike

    Bob Baur, chief global economist, discusses the Dec. 14 interest rate hike decision by the Federal Open Market Committee.

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  • Could the presidential election affect your investments?

    With debate season upon us, everybody from analysts to the media to your neighbors are talking about the U.S. presidential election.  Between the candidate’s television ads and cable news talking heads, do you ever stop and wonder how all this political activity could affect the stock market? And, more importantly, your own investments?

    As always, the important thing to remember is to stay calm. This election will determine America’s 45th president, so we’ve been here before. Here’s what you need to know.

    The why behind the wavering

    Before and after a presidential election, the markets can fluctuate based on:

    • Uncertainty. Often, market volatility isn’t necessarily a result of who wins. Instead, it can depend on whether or not there’s a clear winner. The market doesn’t like surprises, so it tends to react more positively when the outcome of a presidential race is pretty certain ahead of time.
       
    • The election cycle itself. A popular market theory—the presidential election cycle theory—says the financial markets weaken in the year after a presidential election.1
       
    • Which party takes power. The elected party develops policies that directly affect the country’s revenue and spending. An interesting fact (or coincidence, depending upon your affiliation) is that with the exception of President Gerald Ford, the stock market has historically performed better under Democratic presidents than under Republican presidents.2

    What else is in play?

    Let’s remember this election isn’t happening in a vacuum. There are additional economic factors to consider when navigating market uncertainty:

    • Limited to moderate growth in markets such as China and Japan
    • An increase in interest rates after seven years of Federal Reserve (the Fed) accommodation
    • Significant foreign-policy issues around the world

    Remember two things

    As you listen to the candidates for U.S. president, here are couple things to remember:

    1. The Fed’s goal is to maintain low unemployment and inflation. It is structured by Congress to “not become subject to political pressures.3 
    2. For most, investing is a long-term plan that requires long-term economic growth beyond the term of one President.

    Control what you can

    As your mother may have said, this too shall pass.

    Instead of worrying if the election will impact the markets, think about what you can do to reach your long-term financial goals.

    We have a few resources to help you cope with the ups and downs of the market while still planning for your retirement:

    • Check out this quick read for tips on how to keep a cool head during market volatility.
    • Learn more by watching a replay of our Coping with Market Volatility webinar anywhere, anytime.
    • Take steps now to see if you’re on track to meet your retirement goals with our planner (or log in if you have a retirement plan with us).
    Tips for keeping a cool head

    Instinct often causes people to make financial decisions emotionally—not logically. You can rise above those emotions to make smart, measured investment decisions.

  • Get retirement ready: Boosting your contributions

    By contributing to a retirement plan, you’re already on the path to help secure your financial future. But could you be saving more? Making the most of your organization’s retirement plan now could help ensure your golden years are even brighter.

    Review your plan for retirement at least annually

    Job changes, marriage, divorce, a new baby—a lot can happen in the span of a year. That’s why it’s a good idea to take a look at your plan for retirement (either on your own or with a financial advisor) at least annually or as significant events occur. 

    See if you could save a little more

    Think about all the little (non-essential) things you pay for every day. Maybe it’s a morning latte, or lunches out.

    Cutting or reducing these expenses could allow you to increase your contribution. Raising your contribution just 1% will only make a small difference in your paycheck—but may make a big difference down the road.

    Consider this example for a $35,000 annual income:

    Additional ContributionReduction In Bi-Weekly Take-Home PayEstimated Additional Monthly Retirement Income
    5%$50$933
    3%$30$560
    2%$20$373
    1%$10$187

    Think about increasing your percentage until you’re saving 10% of your eligible pay. Ready to make a change now? Log in to your account to increase your contribution.

    Don’t forget about inflation

    You might feel like you’re saving plenty to continue the lifestyle you live today in retirement. But even though your income may increase, so will your cost of living. For instance, in 1980, a gallon of milk cost $1.60.1 Today, it costs $3.98.2

    Contributing more to your retirement account now may help you keep up with or outpace inflation. Your retirement savings may have to last for 30 years or longer. The more you can put away now, likely the better off you’ll be.

    If you’re 50 or older, consider catch-up contributions4

    Sometimes life makes it difficult to save as much as we want. Fortunately, catch-up contributions can help you close the gap.

    In 2016, anyone enrolled in their employer’s retirement plan and still working can make a maximum annual contribution of $18,000.3 But, if you’re 50 or older, you can contribute an additional $6,000after you’ve reached the annual maximum. And since these contributions are pre-tax, they’ll lower your current taxable income even more.

    Also, remember to take a look at how you’re investing under the plan. As you get closer to retirement, it’s generally a good idea to invest in traditionally less risky, more stable investment options.

  • Planning Tools & Calculators

    Find useful tools for tracking your savings progress, estimating your coverage needs, and taking control of your financial future.

    Retirement Wellness Planner

    Quickly see whether you’re on track to reach your retirement goals, and see which small changes could add up to a big impact.

    Log in to see your personalized Retirement Wellness Score based on your current retirement savings with Principal®.

    Don’t have an account with us? Visit our public Retirement Wellness Planner

    Life Insurance Calculator

    See how much coverage you need, get a quick quote for term insurance, and find contact details.

    Use the life insurance calculator

    Learn more about life insurance

    Income Protection Calculator 

    Find out how much coverage you need—and what it will cost—to insure your income if you’re ever too sick or hurt to work.

    Use the income protection calculator

    Learn more about income protection

    We’re here to help.

    Get online help, or find out how to contact us.

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    Access your account information.

  • Create a flexible plan for the future—Whatever it brings

    A personal trust can go a long way in ensuring a happy, secure financial future for your loved ones. But the future is often unpredictable—which is why building a trust with flexibility is essential.

    Why choose a trust vs. a will?

    If you want an estate plan that’s flexible, a personal trust is the way to go. A will only becomes active at death. So if you unexpectedly become ill or unable to take care of yourself, a will doesn’t provide a plan for managing your personal and financial affairs.

    Personal trusts, on the other hand, do. They let you create a plan for your own wellbeing, and also help you take care of loved ones. With a trust, you determine how your assets are distributed, to whom, and when. Trusts stay active during your life and after, providing peace of mind for the present and the future.

    Determine the right kind of trust for you

    Of course, different people have different needs. And there are different trusts to meet them, with varying levels of flexibility. Some common options include:

    • Traditional trust. A traditional trust names a trustee, or co-trustees, to control all aspects of a trust. This often restricts your beneficiaries to using the same trustee for administration, asset selection, and investment allocation.

    • Directed trust. This kind of trust also has a trustee that handles administration and distribution duties. However, beneficiaries can work with a financial advisor of their choice, instead of the trustee or trustee’s portfolio manager.

    • Special needs trust. This trust provides supplemental funds for a child or family member with special needs, without disqualifying them from state or federal benefits. It also establishes a care plan for the future.

    Selecting a trustee

    You should consult an attorney when drafting your personal trust. You may also want to consult a financial advisor. They’ll help you create a trust that anticipates all the needs of you and your family.

    An important part of creating your trust is selecting a trustee. This person manages the trust, including administration and distribution.

    Consider selecting a company (corporate trustee) for this role, instead of yourself or a family member (individual trustee). Corporate trustees provide an unbiased, experienced approach that family members may not have. They also act as a neutral party for any disagreements that may arise.

    You don’t know what the future may bring. But with a flexible personal trust, you and your family can rest easy knowing you’ll be ready.

Retirement planning education

We’re here to help you understand the financial topics that matter to you and how they may apply to the kind of life you want. Learn how you might use the information to help improve your financial future in 30 minutes or less of your time.

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