You have to love it when a company wipes the slate clean and gets back to basics, especially when all that slate cleansing comes with a tidy pile of cash that can be judiciously plowed back into the business. Principal Financial (NYSE:PFG), a leading employee benefits and retirement services firm, completed the sale of its mortgage banking unit last week to Citigroup (NYSE:C) for $1.27 billion ($720 million after taxes).

The two parties had agreed to terms in May. Shedding all mortgage operations, while initially expected to trim operating income by around $0.10 per share, will ultimately allow Principal Financial the flexibility to direct more resources to its core business. At the same time, debts incurred by Principal Residential Mortgage Inc. (PRMI) will be wiped from the balance sheet, and earnings visibility should stabilize once the volatile, interest-sensitive mortgage business is taken out of the picture.

The divestiture leaves Principal Financial with three operating segments, two of which (US Asset Management and Life/Health Insurance) turned out record operating results last quarter. Overall, net income surged 27% to $193.6 million, or $0.60 per share, from $0.47 the year before. Record mutual fund and annuity inflows of $826 million and $463 million helped drive total assets under management to a new high of $149.8 billion.

Yesterday, Fool retirement guru Robert Brokamp reported that a staggering one-third of all Americans fail to contribute anything to their retirement accounts. This is a problem that Principal Financial, the nation's largest 401(k) provider, hopes to mend. Perhaps some of the reluctance to participate stems from a simple lack of understanding (according to surveys, 89% of people report having limited or no investment or retirement planning knowledge). Principal Financial is now armed with tools to educate plan participants and assist with critical asset allocation, rebalancing, and other portfolio decisions.

Without a doubt, there are plenty of companies trying to unseat Principal Financial from the retirement/employee benefits catbird seat. Other insurers such as Manulife Financial (NYSE:MFC) and mutual fund firms like T. Rowe Price (NASDAQ:TROW) are competing for a larger share of the pie, not to mention full-service brokerage firms, bank trust departments, and your neighborhood convenience store.

As the current leader, though, Principal Financial already has a base of 15 million customers who know and trust the name. And when all those retiring baby boomers begin transferring the trillions that are tied up in qualified retirement plans (a figure that seems to grow by a few billion with each new report), that familiarity and name recognition will pay dividends down the line.

Are you one of the 89% who could use some direction with your retirement planning? The Fool's Rule Your Retirement newsletter can steer you in the right direction.

Fool contributor Nathan Slaughter owns none of the companies mentioned.