Principal Introduces Retirement Income Management Solution

August 2, 2001 ( - The Principal Financial Group and Golden Retirement Resources have teamed up to launch a program aimed at helping retirees manage their retirement income.

The Principal Income IRA aims to combine the flexibility of a managed financial plan with the security of an annuity, giving retirees a new alternative for their retirement savings.

Traditional Approaches

Traditionally, people have managed their retirement income:

  • by drawing installments out of their retirement next eggs, deciding on the size of the installment based on factors such as estimated rate of return and life expectancy, with the help of an advisor,
  • or by purchasing an annuity, which pays a fixed amount every month, eliminating the concern that participants may have that they might outlive their money
  • and perhaps too frequently, by simply trying to live off their savings with no real plan

The first approach gives retirees the option of managing their money and riding the changes in the market. Taking advantage of bull markets, but remaining vulnerable to the bears.

The second option put the investment decision in the hands of an insurance company, which is responsible for paying out the distributions. Retirees have no voice in how the money is invested, but are guaranteed a fixed amount.

A “New” Direction

The new program, which uses Golden Retirement’s RetireMENTOR system, allows the retiree to put their nest egg into an IRA. They can manage their asset allocation and then, with the assistance of an advisor, convert retirement assets to secure income, survivor, caregiver and legacy benefits in an integrated rollover IRA account.

The Principal Income IRA will be available to clients of The Principal mid-year 2002 and will be distributed through the company’s existing sales channels.