The Power of Partnership
Tawanda, age 58, has seven years to retirement. With her higher-than-average risk tolerance, she's three-quarters of the way to realizing her goal. Facing market uncertainty in the critical years before and after she retires, Tawanda could benefit from a guaranteed income solution.
With your guidance and the innovative suite of guaranteed income solutions from Prudential Annuities, you can help clients like Tawanda. Just as we’re helping more than 1.2 million people secure retirement income they cannot outlive.
Prudential can help grow your business too–with industry-leading tools, educational resources, and our Retirement Challenge Profiles to help you build stronger client relationships.
Ready to talk? Call our National Sales Desk at (844) 207-6976 today.
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- 1 Social Security Administration Annual Performance Plan for Fiscal Year 2012
- 2 Prudential Retirement- Financial Literacy and Retirement Readiness Study, 2014
Investors should consider the contract and the underlying portfolios' investment objectives, risks, charges and expenses carefully before investing. This and other important information is contained in the prospectus, which can be obtained on the prospectus page or by contacting the National Sales Desk. Your clients should read the prospectus carefully before investing.
Annuity contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Your licensed financial professional can provide you with complete details
What is a variable annuity?
A variable annuity is a contract with an insurance company. It's a long-term investment designed for retirement purposes. You place money in professionally managed investment portfolios, where it accumulates tax-deferred. When you retire, your savings can be used to generate a stream of regular income payments that are guaranteed for as long as you live. In addition, variable annuities may provide a guaranteed death benefit for your beneficiaries. Any such death benefit, however, may be impacted by withdrawals or other actions you take in connection with the annuity. A financial professional can help you determine if a variable annuity is suitable for you.
Why the company behind the annuity matters.
All references to income certainty and guarantees, including the benefit payment obligations arising under the annuity contract guarantees, rider guarantees, benefits, or annuity payout rates are backed by the claims-paying ability of the issuing insurance company. Those payments and the responsibility to make them are not the obligations of the third party broker/dealer from which this annuity is purchased or any of its affiliates. They are also not obligations of any affiliates of the issuing insurance company. All guarantees, including benefits, do not apply to the underlying investment options.
Important information about Prudential Premier Retirement Variable Annuity
What are the withdrawal consequences?
Since the annuity is designed to provide a guaranteed income stream for retirement, there are limitations and restrictions when making withdrawals that are not intended for retirement income purposes. Withdrawals in excess of the Annual Income Amount impact the value of your benefit and can also affect the certainty of their income. An excess withdrawal occurs when the cumulative Lifetime Withdrawals exceed the Annual Income Amount in any annuity year. If an excess withdrawal is taken, only the portion of the Lifetime Withdrawal that exceeds the remaining Annual Income Amount will proportionally and permanently reduce the Protected Withdrawal Value and the Annual Income Amount for future years. If an excess withdrawal reduces the account value to zero, no further amount would be payable and the contract terminates.
Withdrawals or surrenders may be subject to contingent deferred sales charges. Withdrawals and distributions of taxable amounts are subject to ordinary income tax and, if made prior to age 59½, may be subject to an additional 10% federal income tax penalty sometimes referred to as an additional income tax. Withdrawals, other than from IRAs or employer retirement plans, are deemed to be gains out first for tax purposes. Withdrawals reduce the account value and the living and death benefits.
Understanding the costs associated with the Highest Daily Lifetime Income benefit and the Variable Annuity
Variable annuities offered by Prudential companies have an annual cost of 0.55% to 1.95% for mortality expense and administration fees, with an additional fee related to the professional investment options. The fees will vary depending on the underlying annuity and investment options selected. The optional benefit, HD Lifetime Income, has an additional annual fee of 1.00% based on the greater of two amounts, the Account Value or Protected Withdrawal Value, which can help avoid the risk of outliving retirement income. Account value is not guaranteed, is subject to market fluctuations, and may lose value. The Protected Withdrawal Value is only used to calculate the guaranteed lifetime income and the charge for the benefit. It is separate from the account value, and not available as a lump sum withdrawal.
What happens to my Account Value during volatile market situations?
The Highest Daily Lifetime Income v3.0 suite of benefits, uses a predetermined mathematical formula to help us mitigate some of the financial risks we incur in providing the guarantees under this benefit through all market cycles. Each business day, the formula determines if any portion of your account value in your permitted sub-accounts (asset allocation portfolios), including any Dollar Cost Averaging (DCA) Market Value Adjusted (MVA) options needs to be automatically transferred into or out of the AST™ Investment Grade Bond Portfolio (the "Bond Portfolio"). Amounts transferred by the formula depend on a number of factors unique to your individual annuity and include:
- The difference between the account value and the Protected Withdrawal Value;
- How long you have owned the benefit;
- The amount invested in, and the performance of, the permitted subaccounts, the Bond Portfolio, and the Secure Value Account (SVA); and
- The impact of additional purchase payments made to and withdrawals taken from the annuity.
The formula will not transfer amounts to or from the SVA. On any given day, no more than 30% of the account value in the permitted subaccounts (plus any DCA MVA options) may be transferred to the Bond Portfolio pursuant to the formula. Therefore, at any given time, some, most, or none of the Account Value may be allocated to the Bond Portfolio. Transfers to and from the Bond Portfolio do not impact any income guarantees that have already been locked in. You may not allocate purchase payments or transfer account value into or out of the Bond Portfolio.
The formula could mean that you miss opportunities for investment gains in the permitted subaccounts while amounts are allocated to the Bond Portfolio. The formula's allocation of amounts to the Bond Portfolio, however, could also protect your account value from losses that may occur in the permitted subaccounts. Please note: We are not providing investment advice through the formula. See the prospectus for complete details.
We will automatically allocate 10% of each purchase payment to the SVA. You cannot make transfers into or out of the SVA. The SVA will earn interest daily at a crediting rate declared annually.
What do I need to consider when investing in a VA with the Highest Daily Lifetime Income benefit?
Asset allocation does not ensure a profit or protect against a loss. Investment returns and the principal value of an investment will fluctuate so that an investor’s units, when redeemed, may be worth more or less than the original investment. The value or price of a particular stock or other equity or equity-related security owned by a portfolio could go down and you could lose money. Fixed income investments are subject to risk, including credit and interest rate risk. Because of these risks, a subaccount’s share value may fluctuate. If interest rates rise, bond prices usually decline. If interest rates decline, bond prices usually increase. Diversification does not assure against loss in a declining market.
Certain portfolios may use leverage, short sales, and derivatives or engage in other speculative practices within their alternative investments. These practices include a high degree of risk and may increase the risk, size, and velocity of investment losses. Although certain alternative strategies seek to reduce risk by attempting to reduce correlation with equity and bond markets, no guarantee can be given that such efforts will be successful. The fees and expenses associated with alternative investments are generally higher than those for traditional investments.
The optional benefits have certain investment, holding period, liquidity, and withdrawal limitations and restrictions. Optional living and death benefits may not be available in every state and may not be elected in conjunction with certain optional benefits. Please see the prospectus or ask your advisor for more information.
Issued on Contracts or Riders: P-BLX/IND(2/10), P-CR/IND(2/10), P-RID-HD(2/14), P-RID-HD-HDB(2/14) or state variation thereof.
Important information about Prudential Defined Income Variable Annuity
What are the withdrawal consequences?
Since the annuity is designed to provide a guaranteed income stream for retirement, there are limitations and restrictions when making withdrawals that are not intended for retirement income purposes. Withdrawals in excess of the Guaranteed Income Amount impact the value of your benefit and can also affect the certainty of their income. An excess withdrawal occurs when your cumulative Lifetime Withdrawals exceed your Guaranteed Income Amount in any annuity year. If an excess withdrawal is taken, only the portion of the Lifetime Withdrawal that exceeds the remaining Guaranteed Income Amount will proportionally and permanently reduce the Guaranteed Income Amount for future years. If an excess withdrawal reduces the account value to zero, no further amount would be payable and the contract terminates.
Understanding the costs associated with the Prudential Defined Income Variable Annuity.
The annual fee for the Prudential Defined Income VA is 1.10%, plus an additional benefit fee of 0.80% for a total annual fee of 1.90%. We reserve the right to increase the benefit fee up to a maximum of 1.50% at any time on or after the 7th annuity anniversary on existing contracts. Please see the prospectus for additional information. This would increase the total annual product charge to a maximum of 2.60%. Note: There is also an additional fee for the ASTTM Multi-Sector Fixed Income Portfolio.
What do I need to consider when investing in the Prudential Defined Income VA?
The annuity does not provide a diverse set of investment choices nor does it provide the option to allocate your purchase payments or account value among a variety of investment choices with different investment styles, objectives, strategies and risks. The performance of your account value will depend entirely on the performance of the AST Multi-Sector Fixed Income Portfolio.
Fixed income investments are subject to risk, including credit and interest rate risk. Because of these risks, a subaccount's share value may fluctuate. If interest rates rise, bond prices usually decline. If interest rates decline, bond prices usually increase.
The benefit is part of your annuity and you may not cancel the benefit. However, upon specified events, the benefit may be terminated. Please see the prospectus for more details.
Issued on Contracts or Riders: P-BBND(2/13), P-RID-LI-DB(5/14) or state variation thereof.
For Compliance Use Only: 0289753-00003-00 Ed. 06/2016