New Online Resource from The Principal Estimates Time it Might Take to Rebuild 401(k) Account Balance

Wed Jul 1, 12:04 PM

DES MOINES, Iowa--(BUSINESS WIRE)--A lot of participants may be asking themselves: how long might it take to rebuild 401(k) balances after the stock market decline in 2008? A new resource from the Principal Financial Group® estimates the time it might take to rebuild 401(k) account balances to January 2008 levels.

The retirement rebuilding estimator is based on analysis by the nonpartisan Employee Benefit Research Institute (EBRI) of more than 21 million 401(k) participants. The study provides an estimate of how long it might take to get retirement savings back to January 1, 2008 levels based on estimated account balances on December 31, 2008.

“Participants in 401(k) plans are eager to get an idea of how long it might take to rebuild retirement accounts,” said Luke Vandermillen, vice president of marketing at The Principal®. “Our estimator helps answer that question and provides tips that can help the process.”

The retirement rebuilding estimator asks users for three pieces of data:

  • account balance on December 31, 2008
  • total annual contributions (employee and employer combined)
  • anticipated rate of return for the rebuilding period

Users receive an estimated rebuilding time based on an input rate of return for accounts from the study with similar balances and contribution rates — and shows the potential difference increased contributions to an account can make.

“The estimator also serves as a reminder for plan participants to focus on what they can control,” said Vandermillen. “Obviously they can’t control the market, but they can help the rebuilding time by increasing contributions and ensuring their investment allocations fit their tolerance for risk.”

The retirement rebuilding estimator is available to the public at www.principal.com/rebuild.

About the Principal Financial Group

The Principal Financial Group® (The Principal ®)1 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 $236.6 billion in assets under management2 and serves some 18.8 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.

About EBRI

The Employee Benefit Research Institute (EBRI) is a private, nonprofit research institute based in Washington, D.C., that focuses on health, savings, retirement and economic security issues. EBRI does not lobby and does not take policy positions. The EBRI analysis is published in the February 2009 EBRI Issue Brief, "The Impact of the Recent Financial Crisis on 401(k) Account Balances," online at www.ebri.org.

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1 “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

2 As of March 31, 2009

Principal Financial Group
Jaime Naig, 515-247-0798
naig.jaime@principal.com
or
Terri Hale, 515-283-8858
hale.terri@principal.com