Prudential Annuities has released some new annuity products over the past year and a half. Each product offers benefits geared towards a specific group of people. All of the products were designed as alternative ways to save and provide income instead of traditional savings and CDs. Their newest variable annuity, Prudential Premier Investment, is an investment only product made for investors who are looking for tax protection. In the Main Street article, “Innovative Variable Annuity Designed to Alleviate Investor Tax Pressure,” Juliette Fairley discussed this new variable annuity and Prudential’s other new products.
Variable annuities are designed to offer exposure to the markets with some form of protection. They are different from fixed annuity products that specifically guarantee you returns. The Insured Retirement Institute found that Americans have $18 trillion invested in mutual funds and managed money assets compared to only $2.6 trillion invested in annuity products. Prudential’s Premier Investment variable annuity has been designed to get more investors who want stock market exposure to consider annuities. This particular product offers tax deferral until you start receiving income payments from your annuity as well as the ability to reposition your investment accounts through tax-free transfers. You can reduce your expenses as the value of your assets grows. Your money is invested in equity and fixed income options, alternative assets, as well as global and domestic strategies.
One of Prudential’s other recent product additions is the Prudential Immediate Income Annuity. The single premium immediate annuity was designed with women in mind as well as other investors who wouldn’t normally look at annuity products. Single premium immediate annuities are able to offer the highest minimum income payments for premium paid compared to variable annuities, but offer no cash value. Women are most likely going to live longer than their male peers and they must find a way to finance that longer life. Single premium annuity products allow you to maximize your income without being exposed to market volatility.
Deferred income annuities provide even more income because the payments are deferred until a later date and there is a slight risk that you will die before receiving any income payments. Prudential’s newest deferred income annuity is called the Defined Income Variable Annuity. This is a bit of a twist from other deferred income annuities that are not variable. This DIA offers more market exposure. Single premium immediate annuities protect clients from both equity risk and behavior risk. Each different type of annuity product offers a different kind of market exposure and protection benefits. Make sure that you know the difference between Prudential’s newest annuities and how they may help you reach your retirement goals.