Retirement plan participants using an online tool save at an average rate of 39% higher than other plan participants, according to a study by
Principal first launched the tool, called My Principal Edge Milestones, in 2008. The online feature evaluates retirement savings and then provides an investment plan towards a specific savings goal.
To date, 94,000 of Principal’s 401(k) plan participants have used the online tool. Those users have a higher deferral rate of 2.5% versus those who have not used the tool, or 8.9% compared to 6.4%, based on a sample group. That higher savings rate could mean an additional $150,000 in retirement savings, said Principal Vice President of Individual Investor Services Barrie Christman.
Principal also analyzed a sample group from 30,000 first-time users of the tool in 2010. From that group, Principal found that 46% started deferring or increased their deferral amount. Clients who deferred for the first time did so at a 7% higher rate than general plan participants. In addition, clients who used the tool increased their deferral at a rate of 56%.
Principal works with business, institutional and individual clients to provide retirement and investment services, banking and health and life insurance.
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