Retirement, Investments, & Insurance for Individuals Frequently asked questions

Frequently asked questions

Frequently asked questions

We have answers to some frequently asked questions about retirement.

What is a retirement savings plan?

Retirement savings plans help you set aside money today that you can use to help replace your working income in retirement. A retirement savings plan can be offered through your workplace where you contribute a percentage of your paycheck—typically before taxes, although you might have additional contribution types available to you. The money is then invested according to your investment allocation to the investment options available through the plan. How much you may need to save is based on your personal situation and your goals for the future.

A 401(k) or 403(b) are a couple of examples of the types of retirement savings plans that might be offered through your workplace.

Keep in mind, retirement savings plans are designed to be a long-term savings option—meaning, the money should remain saved and invested until you need to use it in retirement.

What is a "401(k)" plan?

A 401(k) is one type of retirement savings plan that might be offered by your employer. The term “401(k)” is the code that the Internal Revenue Service, IRS, has given to this type of retirement plan.

Whwat is a "403(b)" plan?

“403(b)” refers to a type of retirement savings plan that may be offered to certain employees of public schools or certain tax-exempt organizations.

What is a "457 plan"?

“457 plan” refers to a type of retirement savings plan that is typically available to governmental and certain non-governmental employees.

How do I access your website to see my account information?

The Principal® website is available in English at and in Spanish at You can freely browse the site for savings tips and articles, but to view your account information you will need to login with your username and password through the English site. We understand setting up and accessing your account may be a little confusing, so we created an account access tutorial to help walk you through the process.

If you are having trouble setting up or logging in to your online account, give us a call at 800-986-3343 (press 1 for Spanish).

Am I required to save in my employer's retirement plan?

Contributing to a retirement savings plan is your choice. But taking advantage of this savings option is a great way to help save for your future. Having a source of income you can rely on in retirement makes it easier for you to continue living the life you want.

What is a "contribution" or "deferral"?

A “contribution” or “contribution percentage” is the amount of your paycheck you decide to set aside to your account in the retirement savings plan. This may also be called a “deferral.” This amount can come from your paycheck before income taxes are taken out of your check. You will pay taxes on that money you set aside when you withdraw it—these are called tax-deferred contributions. Depending on the options available in the plan, you may be able to make Roth or after-tax contributions. This means the amount you contribute will be taxed with your income but won’t be when you withdraw it (as long as certain requirements are met.1)

Do I have to invest in separate accounts and mutual funds or can I buy gold or shares of other companies?

Your employer chooses the types of investment options available in the plan. Unless your employer offers other choices including the option to buy gold or invest in shares of another company, you cannot make these purchases with your contributions.

Can my spouse also make contributions to my retirement savings account?

No. Your plan is registered with your name and Social Security number (or other identification number) at your employer. However, your spouse can open a personal retirement account, like an IRA, that they can make contributions to.

How do I access money in the account?

Your retirement savings is designed to be a long-term savings option to help you replace income when you reach retirement. Depending on the retirement plan rules, you may be able to take a loan or request a withdrawal to take money from your account, if needed, while you’re still employed with the plan sponsor. Keep in mind, taxes, fees and penalties may apply for taking a withdrawal. It’s important to carefully consider the impact an early withdrawal from your retirement savings could have on your future.

If you leave your current employer, you typically have options for the retirement savings you have accumulated, which may include keeping the funds invested in the plan, moving to a new plan or opening and Individual Retirement Account (IRA).

I need money and a colleague told me that I can take a loan from my retirement account. Is it true?

Some retirement plans may allow you to borrow money from your retirement savings through a loan. Keep in mind, your retirement savings is designed to be a long-term savings for your future, so you should consider carefully the potential impacts of taking a loan:

  • The money taken will no longer be invested which means you could lose out on potential earnings
  • If you reach a benefit event (leave your current job or retire) the loan will become due and payable in full, or the loan will be considered a taxable event.

When you take a loan, you will be responsible for repaying the loan amount, plus any interest and fees.

To find out if a plan loan might be available to you log in to your online account or talk to your human resources representative.

Why do I have to pay taxes and penalties?

Traditionally, contributions made to your retirement account are made from your paycheck before income taxes are taken out. This means, when you withdraw the money, you will need to pay the taxes owed. Since a retirement savings account is designed to help you save for retirement, you will face an additional IRS tax penalty if you choose to withdrawal the funds before either age 55 or 59½ depending on your employment status.

Some plans may allow you to make Roth and/or after-tax contributions to the retirement savings account. In that case, you do pay income tax on the money right when you contribute it. In return, you can generally withdraw the funds tax-free as long as certain requirements are met.1 However, if you withdraw the money before age 59½ the additional IRS penalty may still apply.

Talk to your financial professional or tax advisor for more information about taxes and penalties that may apply to taking money from your retirement savings account.

How often will I receive an account statement?

Depending on the provisions of the plan, you could receive a statement once every 3 months, once every 6 months or once per year. But remember that you can log into your online account to see your account balance.

What does my rate of return mean?

The rate of return on an investment option represents the performance over a specific period of time. Your Personalized Rate of Return is important because it shows the performance of the investment option or options your retirement savings account is invested.

Your personalized rate of return can vary based on a number of factors, including market volatility which is the ups and downs in the market. It can also vary based on what types of investment options you’ve directed money to. More aggressive investment options typically have the potential to see higher gains or losses, while more conservative investment options may experience less volatility.

To see your personal rate of return, log in to your account.

Does my employer also contribute to my retirement savings?

As part of your employee benefits, your employer may offer to make a contribution to your retirement savings account based on the amount you personally contribute. Why? Your employer might have several reasons why they make a matching contribution to your retirement savings. But in general, they want to help you save for the future. Talk to your human resources department find out if your employer offers a matching contribution and what you can do to take advantage of it.

Can I move money from my retirement savings with a previous job to my new retirement savings account?

You may be able to move money from your other retirement savings accounts to your account under your current employer’s plan. This can be a great way to keep an eye on your savings with one account log in. To find out if this option is available, talk with your plan representative or human resources representative.

How the market is behaving today?

You can find your personal rate of return on the account overview page when you log in to your online account. You can review the performance of the investments available under the plan. Moreover, you can also visit the official website of the stock exchange Dow Jones, Nasdaq, etc. to see current market performance for the market as a whole.

I turned 65 years old and would like to retire. What are my options?

First of all, congratulations! You have worked hard all these years and now is the time to enjoy the fruits of your effort. When it comes to taking money from your savings in retirement, you have several options to consider, and making a decision on what to do with your savings can be confusing. But you don’t have to go it alone. To review your options, give our retirement specialists a call at 800-547-7754 (press 1 for Spanish).

My statement shows that I'm losing money. Why?

Some investments are riskier than others and may lose value in the short term. However, they could recover over time. We suggest you read more about how investments work on our website or receive information from your financial professional or our retirement specialists.

What do I do if I can't log in to my account online?

If you’re having trouble logging in or setting up your online account, we can help. Give us a call at 800-986-3343 (press 1 for Spanish).

Is access to my online account safe?

Safeguarding your information’s confidentiality, integrity, and availability is one of our highest priorities. The account information you request from our website can only be accessed with your username, password and, in certain situations, unique verification codes. It is your responsibility to keep your login information confidential.

Why do I need to set up an online login for my retirement savings account?

That’s a great question, and one we hear a lot. With all the account set up requests we get, it can be overwhelming. But setting up an online login for your retirement savings account is an important step to help secure your information. Setting up your login and your two-factor authentication, means no one else can try to create an online account on your behalf.

What does my Retirement Wellness Score mean?

The Retirement Wellness Score represents an estimate of the percentage of your pre-retirement income you may have available once you retire. This number helps you see if you’re on track with your savings goals. The score compares what you are estimated to have in monthly income at retirement against your estimated monthly pre-retirement income. Your Retirement Wellness Score is an estimate based on the information provided by you and your employer.

Do I need to name a beneficiary?

Designating a beneficiary for your retirement savings is important because this typically overrides all other estate documents, including wills. That’s why it’s important to review your beneficiary information on a regular basis or as life events happen. If you don’t name a beneficiary, your retirement savings will generally go to your spouse.

1 You’re at least age 59½ and the money has been in your account for at least 5 years.

The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment, or accounting obligations and requirements.

Beneficiary designations are legal designations that are needed whenever a qualified retirement plan provides benefits to beneficiaries of deceased participants. They state who is to receive the benefits and how benefits are to be paid in the event of a plan participant’s death. Certain beneficiary designations cannot be completed online. Instead, a paper form must be completed and signed. If needed, you will be given the option to print the paper beneficiary form from the website. Based on your marital status, your designation may require spousal approval.

The Retirement Wellness Planner information and Retirement Wellness Score are limited only to the inputs and other financial assumptions and is not intended to be a financial plan or investment advice from any company of the Principal Financial Group® or plan sponsor. This calculator only provides education which may be helpful in making personal financial decisions. Responsibility for those decisions is assumed by the participant, not the plan sponsor and not by any member of Principal®.  Individual results will vary.  Participants should regularly review their savings progress and post-retirement needs.  

You should consider the differences in investment options and risks, fees and expenses, tax implications, services and penalty-free withdrawals for your various options.  There may be other factors to consider due to your specific needs and situation.  You may wish to consult your tax advisor or legal counsel.

Principal, Principal and symbol design and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

​Insurance products and plan administrative services provided through Principal Life Insurance Co. Securities offered through Principal Securities, Inc., 800-547-7754, member SIPC and/or independent broker-dealers. Principal Life, and Principal Securities are members of the Principal Financial Group®, Des Moines, Iowa 50392.