The Principal Issues Retirement Savings Challenge
Save 10% for a healthier future, new report tracks retirement savings
In an effort to boost financial fitness and retirement savings, the Principal Financial Group® raises the savings bar with a 10% Challenge to retirement plan participants and a new way to track progress through a Retirement Wellness Report. The challenge and the report, which offers a personalized look at current retirement savings and estimated monthly retirement income, can help participants get on track for a healthier retirement.
"Nationwide as few as one in five employees are on track for retirement, making financial stress a constant pressure in their lives. That's why we're challenging individuals to step up and exercise their financial fitness in the same way they do their physical wellness to make a significant impact on the long-term health of their retirement savings," said Jerry Patterson, senior vice president Retirement and Investor Services for The Principal®. "Based on our extensive research on savings behavior, we are fundamentally changing our approach with retirement plan participants. New tools like the Retirement Wellness Report and the 10 percent challenge harness the power of human nature to make a significant impact on the health of retirement savings."
Drop and give 10
The "Take the 10% Challenge" is an educational campaign that encourages participants to push themselves in the race toward retirement security by deferring at least 10 percent of their salary. Those who accept the challenge are eligible to win a Fitbit FlexTM1 (or comparable activity tracker) to help monitor their physical fitness progress.
"Our analysis has found that, on average, participants need to save at least 10 percent of salary plus employer match over the course of a working career in order to save enough for a secure retirement," said Patterson. "That's nearly twice as much as what people are saving now. If goals and rewards motivate people to get physically healthy, why not use the same approach to help them build financial health?"
With the new participant Retirement Wellness Report, The Principal visually shows retirement plan participants if they are saving enough to reach a successful retirement. The individualized report includes an at-a-glance view of their estimated monthly retirement income and compares that to the retirement income they will need each month. For those with an income gap, simple illustrations show the impact of a deferral increase. Participants with a gap in savings are encouraged to increase their contribution election or sign up for automatic increases to help get them on track.
Patterson notes, "By simply showing a projected monthly retirement income, participants can quickly determine if they are really saving enough for retirement. Learning that a $50,000 balance would amount to only $260 in retirement can be a real wake-up call."
Tracking plan success
Last year The Principal introduced a Retirement Readiness Report for employers showing how many of their employees are on track to reach a successful retirement. Part of an overall innovative approach to retirement readiness, the participant and employer reports support Principal® PlanWorks, which focuses on encouraging participants to save adequately for retirement.
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About the Principal Financial Group
The Principal Financial Group® (The Principal®)2 is a global investment management leader offering 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 $483.2 billion in assets under management3 and serves some 19.4 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 www.principal.com.
1 Fitbit FlexTM is a registered trademark of Fitbit, Inc.
2 “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
3 As of December 31, 2013.