Principal Financial IRA Review

Principal Financial Rollover IRA, Roth, Traditional IRA, IRA for Minors, Beneficiary IRA, SEP, SIMPLE IRA, Individual 401(k) individual retirement accounts review, promotion offer, rating, fees and commissions.

Principal Financial IRA Services
There are several IRA services available online or by calling Principal’s customer service department. The website is fairly intuitive and easy to navigate, however there are not any features to change investment holdings. Investors can obtain up-to-date account values, interest % and fees charged ($15 annual fee per account).

Services available online for IRAs are updating contact information, making contributions or distributions, assigning beneficiaries, transferring IRA or converting to ROTH IRA. There is also some information available online such as how FDIC Insurance works and the investment disclosures. Any other information or services needed must be completed by calling Principal’s customer service.

Obtaining to date value of accounts is extremely easy, helpful and intuitive, but the overall online service tools available are lacking compared to other similar investment websites.

One can easily make contributions to their IRA accounts either electronically or they can mail a check to contribute.

The Principal website is extremely helpful when setting up electronic contributions giving the user options for which tax year they want the deposits to go towards with ample explanations of tax concerns for the investor. The website also walks investors through the appropriate options for making deposits without over contributing. Over contributing creates tax issues for the investor, so this feature is very helpful especially for investors over 50 years old. In addition, online investors can select options for rollovers from eligible employer sponsored retirement accounts. This feature is very useful, because it can save investors time and money by eliminating the need to visit a financial advisor for simple tasks they can complete online directly with Principal.

Principal also makes contributions using a handwritten check simple by making their mailing address and contact information easy to find. One important fact investors need to remember, checks must payable to the fund family of their investment and not to Principal directly. The reason is the check is deposited into the fund and not to the company. Overall, Principal makes the contribution process easy for investors.

To make an IRA distribution one must complete a 6 page request covering contact information, reason for distribution, payment method, withholding election, distribution election, IRA tax rules and fees. This form can be very intimidating for investors and consulting with a tax professional is advised. Once this form is complete and signed investors have the option to mail or fax the original copies to Principal. Processing distribution forms can take up to 10 business days.

Fees for distributions are as follows: electronic (ACH) is free, cashiers check is $10, next day overnight mail delivery of cashiers check is an additional $15, next day delivery of cashiers check that falls on a Saturday is an additional $25. Domestic wire transfers are available for a $20 fee and International wire transfer fees are $40.

Overall, Principal’s distribution process is complicated for the average investor without the help of a financial advisor or tax professional. Charging extra fees to mail investor distribution checks leaves a bad impression with the investor.

Early Distribution Fees and Penalties
The normal distribution age to avoid tax penalties is 59 ½ years old. Principal does do a good job explaining and estimating fees and penalties for taking distributions prior to retirement age. Online investors can input a few basic numbers to calculate the early distribution consequences, which on average is 40% of the amount the investor is wanting to liquidate. This calculation feature is very helpful and easy to use. All investors should run this calculation before taking an early distribution.

Available Calculators
A major plus to Principal’s website is a section called “Calculators.” Investors can run calculations on their IRA accounts that are extremely helpful for planning their retirements. These calculators assist in letting the investor know if they are putting enough away for their future retirement needs, which if used correctly could really benefit users. Most retirement planners use similar calculators to simulate what investors will need in retirement, so instead of paying a financial planner, investors can use these free online calculators to make wise retirement decisions.

Other calculators available on Principal’s website are: auto financing, bond, budgeting, college planning, credit card, credit line, home financing, insurance, retirement, Roth IRA, savings and stocks. All of these calculators are free, easy to use and great planning tools.

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Principal IRA Review Final Thoughts
After going through Principal’s website from top to bottom it gets average remarks. The best features are the calculators available, but many similar investment companies have calculators as well. The lack of actual IRA holding options online is a major downside. In this ever advancing digital age investors should be able to see their holdings broken down by fund and able to move to other funds as desired. Many of the Principal's competitors have these options readily available to customers online.

In summary, Principal Financial does not have much to offer to retirement savers and there are much better options available for IRA.


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