Updated 2026-03-30
Vanguard vs Principal 401(k) Comparison
Compare Vanguard (#2, 9.3/10) and Principal Financial (#6, 8.3/10) side by side across fees, ratings, features, and investment options.
Overall Comparison
| Feature | Vanguard | Principal |
|---|---|---|
| Overall Score | 9.3/10 | 8.3/10 |
| Rank | #2 | #6 |
| AUM | $8.6 trillion | $700 billion |
| Participants | 32 million | 6 million |
| Plan Sponsors | 5,600+ | 46,000+ |
| Founded | 1975 | 1879 |
Ratings Comparison
| Category | Vanguard | Principal |
|---|---|---|
| Fees & Costs | 5.0/5 | 3.5/5 |
| Investment Options | 4.5/5 | 3.8/5 |
| Customer Service | 4.2/5 | 4.2/5 |
| Mobile App | 4.0/5 | 3.9/5 |
Fee Comparison
| Fee Type | Vanguard | Principal |
|---|---|---|
| Admin Fees | $0 - $60/year | $1,500 - $5,000/year for small plans |
| Expense Ratios | 0.03% - 0.50% | 0.25% - 1.5% |
| Trading Fees | $0 for Vanguard funds | Varies |
| Advisory Fees | 0.30% | 0.40% - 1.0% |
Vanguard Strengths
- Lowest expense ratios in the industry
- Investor-owned structure aligns interests
- Excellent target-date fund lineup (VTIVX series)
- Admiral Shares offer even lower costs at $3,000 minimum
Principal Strengths
- Excellent for small business 401(k) plans
- Bundled benefits solutions
- Strong customer service for plan sponsors
- SimpleInvest managed portfolios
Rollover, Loans & Withdrawals
| Feature | Vanguard | Principal |
|---|---|---|
| Rollover Platform | Vanguard.com | Principal.com |
| Loans Available | Yes | Yes |
| Withdrawal Methods | Online via Vanguard.com, Phone (800-523-1188) | Online via Principal.com, Phone (800-547-7754) |
| Distribution Options | Lump sum, Partial withdrawal, Systematic withdrawals, Rollover to IRA | Lump sum, Partial withdrawal, Installment payments, Annuity purchase, Rollover to IRA |
Which Should You Choose?
Choose Vanguard if you want:
- Buy-and-hold investors
- Cost-minimizers
- Index fund believers
- Long-term planners
Choose Principal if you want:
- Small businesses
- Bundled benefit seekers
- Companies wanting insurance integration
Our Verdict: Vanguard vs Principal
Vanguard wins this comparison with a score of 9.3/10 vs 8.3/10. Vanguard excels with lowest expense ratios in the industry, making it the stronger choice for most investors in this matchup. However, the best choice ultimately depends on your specific needs, employer plan availability, and investment preferences.
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Vanguard vs Principal: Complete 401(k) Comparison for 2026
Choosing between Vanguard and Principal Financial for your 401(k) is an important decision that affects your retirement savings. Vanguard offers lowest costs while Principal is known for small business focus. In terms of fees, Vanguard charges 0.03% - 0.50% expense ratios compared to Principal's 0.25% - 1.5%. Vanguard manages $8.6 trillion in assets and serves 32 million participants, while Principal has $700 billion AUM and 6 million participants.
Key Differences: Vanguard vs Principal
When comparing Vanguard and Principal, consider their core strengths: Vanguard excels with lowest expense ratios in the industry, while Principal stands out for excellent for small business 401(k) plans. Both providers offer a wide range of investment options including target-date funds, index funds, and managed accounts. Vanguard's customer service rating is 4.2/5 compared to Principal's 4.2/5. For mobile experience, Vanguard scores 4.0/5 while Principal scores 3.9/5.
Which Provider is Right for You?
Choose Vanguard if you prioritize buy-and-hold investors. Choose Principal if you're looking for small businesses. Your decision should also consider your employer's plan availability, fee sensitivity, desired investment options, and customer service expectations. For detailed reviews, visit our individual Vanguard and Principal provider pages.
Frequently Asked Questions
Vanguard scores higher in our 2026 rankings with 9.3/10. Vanguard is best for buy-and-hold investors, while Principal is best for small businesses. The right choice depends on your employer's plan and your priorities.
Vanguard charges expense ratios of 0.03% - 0.50% with admin fees of $0 - $60/year. Principal charges 0.25% - 1.5% expense ratios with admin fees of $1,500 - $5,000/year for small plans. Vanguard's fees rating is 5.0/5 compared to Principal's 3.5/5.
Yes, you can roll over between Vanguard and Principal. Vanguard uses Vanguard.com for rollovers, while Principal uses Principal.com. A direct rollover avoids mandatory tax withholding. Contact your new provider to initiate the transfer.
Vanguard offers 401(k) loans. Principal offers 401(k) loans. Both providers typically allow loans up to 50% of your vested balance or $50,000, whichever is less.
Vanguard scores 4.5/5 for investment options, while Principal scores 3.8/5. Both offer target-date funds, index funds, and managed accounts. Vanguard's investment options include Index Funds, Target Date Funds, Mutual Funds. Principal offers Mutual Funds, Target Date Funds, Stable Value.
For small businesses, consider plan minimums and per-participant costs. Vanguard is best for buy-and-hold investors, cost-minimizers, index fund believers, long-term planners. Principal is best for small businesses, bundled benefit seekers, companies wanting insurance integration. Compare admin fees: Vanguard charges $0 - $60/year vs Principal's $1,500 - $5,000/year for small plans.
Pavlo Pyskunov
Managing Director & Investment Fund Director
Pavlo Pyskunov analyzes employer-sponsored retirement plans using IRS publications and DOL Form 5500 filings, helping workers maximize their 401(k) savings through data-driven guidance.
Last updated: 2026-03-30