Some factors to consider about a registered index-linked annuity: There are typically caps on investment gains, and fees and commissions are typically higher on these products.
Please discuss the pros and cons of a registered index-linked annuity with a financial professional to see if it’s a right fit for your financial plans.
Before you invest in a variable annuity, you should carefully consider its investment objectives, risks, charges and expenses, as well as the underlying investment options it offers. You can find this and other information in the free prospectus, and if available, the summary prospectus, which you can obtain from your local representative. We strongly encourage you to read the prospectus carefully before making an investment.There are risks involved with investing, including the possible loss of your principal. We don’t guarantee that the strategies described will achieve their goals.
Principal® Strategic Outcomes does not directly participate in any stock, equity investments or index. It is not possible to invest directly in an index.
IMPORTANT CONSIDERATIONS
Index-linked deferred annuity contracts are complex insurance and investment vehicles. This contract is a security and there is a risk of substantial loss of principal and earnings. The risk of loss may be greater when early withdrawals are taken due to any charges and adjustments applied to such withdrawals. These charges and adjustments may result in loss even when the value of a segment option has increased. Clients should consult with a financial professional about the appropriateness of this product based on their financial situation and objectives.
Withdrawals will reduce the contract value and death benefit. Some withdrawals may be subject to additional charges and adjustments. Withdrawals before age 59½ may be subject a 10% early withdrawal federal tax penalty in addition to ordinary income taxes.
Annuities have limitations. They are long-term vehicles designed for retirement purposes. Annuities are not intended to fund short-term savings goals.
Annuities aren’t insured by the FDIC, aren’t guaranteed by any other financial institution, and involve risk. The risk includes potentially losing your premium invested if the issuing insurance company isn’t able to meet its obligation.
All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. Policy guarantees and benefits are not obligations of, nor backed by, the broker/dealer and/or insurance agency selling the policy, nor by any of their affiliates, and none of them makes any representations or guarantees regarding the claims-paying ability of the issuing insurance company.
This is not a recommendation and is not intended to be taken as a recommendation. This material was prepared for general distribution and is not directed to a specific individual.
The subject matter in this communication is provided with the understanding that Principal® is not rendering legal, accounting or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.
Contract rider descriptions are not intended to cover all restrictions, conditions, or limitations. Refer to rider for full details. Riders subject to state availability and may be subject to an additional charge.
Annuity products and services are offered through Principal Life Insurance Company. Securities offered through Principal Securities, Inc., member SIPC, and/or independent broker/dealers. Referenced companies are members of the Principal Financial Group®, Des Moines, Iowa 50392, principal.com.
Principal Life Insurance Company, Des Moines, Iowa 50392-0001, principal.com
Principal®, Principal Financial Group®, and Principal and the logomark design are registered trademarks of Principal Financial Services, Inc., a Principal Financial Group company, in the United States and are trademarks and service marks of Principal Financial Services, Inc., in various countries around the world.
© 2023 Principal Financial Services, Inc.
Principal® Pivot Series Variable Annuity:
Contract SF 948/ICC14 SF 948
Riders SF 983/ICC18 SF 983/SF 951/ICC14 SF 951/SF 952/ICC14 SF 952/SF 955/ICC14 SF 955
Principal® Lifetime Income Solutions II Variable Annuity:
Contract ICC16 SF 968, SF 968
Riders ICC16 SF 969/SF 969, ICC16 SF 970/SF 970, ICC16 SF 971/SF 971, ICC17 SF 977/SF 977
Principal® Strategic Outcomes:
Contract: SF 1027
Riders/Endorsem*nts: SF 1028, SF 1029, SF 1030, SF1031, SF 1032
FAQs
A $100,000 immediate income annuity purchased at age 65 could provide around $614 per month. With a 5% interest rate and a 10-year payout period, the same annuity might pay approximately $1,055 monthly. At age 70, a similar annuity could offer a lifetime payout of around $613 per month.
Why I don't like annuities? ›
Burdensome Fees
Some annuities can come with exponentially higher fees than other investment vehicles. Annuities can have sales commissions, administrative charges and investment expenses. In addition, sales agents might not discuss an itemized list of fees upfront, obfuscating how much the contract will cost.
Are annuities actually a good idea? ›
Annuities can provide a reliable income stream in retirement, but if you die too soon, you may not get your money's worth. Annuities often have high fees compared to mutual funds and other investments. You can customize an annuity to fit your needs, but you'll usually have to pay more or accept a lower monthly income.
How much does a $50,000 annuity pay per month? ›
A straight fixed annuity is the easiest type of annuity to calculate a payment from. This is because fixed annuities work like bonds. If you use $50,000 to buy a fixed annuity paying 5% per year, for example, you'll earn $2,500 annually or about $208.33 per month.
How much does a $300,000 annuity pay per month? ›
Here's how much income a $300,000 fixed annuity might pay per month: $3,517 if you choose single life only, which allows you to receive income for life but does not offer a death benefit to your beneficiaries.
What is the biggest disadvantage of an annuity? ›
High expenses and commissions
Cost is one of the biggest drawbacks of annuities.
Has anyone ever lost money in an annuity? ›
The short answer is yes, while most types of annuities can provide a safe haven in volatile markets, in specific circ*mstances they can lose money. Annuities can be a safe option for people saving for retirement and looking for guaranteed income once retirement begins.
What is better than an annuity? ›
In general, 401(k) plans — and the very similar 403(b) plans offered by nonprofit organizations — are a better way to grow your cash for retirement than an annuity.
What is the harsh truth about annuities? ›
Your money may be tied up for life. After-tax annuities can't be undone – once the money is in an annuity structure, it remains in an annuity structure. If you need or want to exit a bad or ugly annuity, you can roll it over to a less expensive annuity if you no longer have surrender penalties.
Why don't retirees like annuities? ›
Why are annuities a poor investment choice? Annuities can be a bad choice for some people—they have higher fees and less flexibility than some savings options. And depending on the type you choose, your heirs may get nothing after you die even if far less was paid out than you had contributed.
So, if you have experience and success managing your funds on your own and can convert your assets into an income, there is no reason to buy an annuity. 2. Don't buy an annuity if you're sure you have enough money to meet your income needs during retirement (no matter how long you may live).
At what age should you not buy an annuity? ›
Age is an important consideration, as that can influence which type of annuity you buy. Early 30s to mid-40s: If you're in your 30s or early 40s, purchasing an annuity might not make sense unless it's a special situation like winning the lottery or settling a lawsuit.
Do you pay taxes on an annuity? ›
If it's a qualified annuity, the money you invested was pre-tax, and 100% of your withdrawals will be taxable. However, if your annuity is nonqualified, you invested using after-tax dollars and pay taxes on the earnings portion of withdrawals.
What happens if an annuity company fails? ›
If you buy an annuity from an insurance company that fails, you do have some recourse. Each state has a guaranty association that protects policyholders when an insurance company fails. There are limits to this coverage, however. The amount you can recover varies by state but is typically about $100,000 per policy.
How much does a $100,000 annuity pay each month? ›
Investing $100,000 in an annuity can offer a sense of security. Based on current annuity rates, this investment might yield a monthly income in the ballpark of $500 to $600.
Should a 70 year old buy an annuity? ›
Most financial advisors will tell you that the best age for starting an income annuity is between 70 and 75, which allows for the maximum payout. However, only you can decide when it's time for a guaranteed stream of income.
What is better than an annuity for retirement? ›
In general, 401(k) plans — and the very similar 403(b) plans offered by nonprofit organizations — are a better way to grow your cash for retirement than an annuity.
How much does a $120,000 annuity pay per month? ›
If a 72-year-old man invests $120,000 in an immediate annuity that pays out only as long as he lives, he'll get about $810 in monthly income.
