What Will Be Covered in this Review?

In this annuity review, we will be going over the following details regarding the Principal Preferred Series Annuity:

  • Product typeIndependent Review of the Principal Income Immediate Annuity
  • Fees
  • Current rates
  • Realistic long-term return expectations
  • How the annuity is best used
  • How the annuity is most poorly used

Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.

If you have been seriously considering the purchase of an annuity because you want to ensure that income will continue to come in during retirement – regardless of how long you may need it – then moving forward with a Principal Preferred Series annuity could be a good option for you.

One reason for this is because, regardless of what happens in the stock market – or even in the overall economy – your money will be safe inside of a fixed rate annuity. Also, when it comes time to convert the annuity over into an income stream, those payments will continue to come in, and can basically alleviate the worry of running out of money down the road.

However, prior to running out and making a commitment to purchase this, or any, annuity, it is important for you to know the benefits that it can offer, as well as any possible drawbacks that it can present to your current and/or future financial situation.

This is where the Annuity Gator comes in!

Annuity and Retirement Income Planning Information that You Can Trust

If this is your first visit to AnnuityGator.com, we would like to officially welcome you here to our website. Here, we comprise a team of experienced financial pros who have a key focus on providing very in-depth annuity reviews. Because we’ve been offering these for a number of years now, we have come to be considered a highly trusted source of annuity information.

If you’ve been in the process of seeking additional details about annuities via the Internet, it is likely that you’ve come across some highly conflicting information with regard to these financial vehicles. This, however, is not really surprising.

There are a plethora of different annuities out there in the marketplace, and there are many people who like to tout their features and benefits, as well as those who feel that annuities aren’t very good at all. However, whether or not an annuity is actually right for you can depend on a number of different criteria. Therefore, there is no one-size-fits-all annuity.

While there are many very good websites online that focus on marketing annuities, some of these websites may try to lure in visitors so that they will part with their contact information. One way that they try to entice you is through the offering of some pretty bold claims about annuities, like:

  • Lowest Fees
  • Highest income payouts
  • Top-rated companies
  • Quick quotes
  • Guaranteed lifetime income

While claims like these can at first glance sound ideal, before diving in and purchasing an annuity, it is critical that you first determine whether or not the claims that are being made are even true – just like you would if you were getting ready to purchase any other high ticket item.

When doing this, you could essentially find yourself swimming in a myriad of annuity “small print” – which, in turn, could make your hunt for information even more tedious and/or confusing.

If you are in search of more information regarding the Principal Preferred Series annuity, then you are definitely in the right place. In fact, we dare say that the website you are viewing right now is the only place where you will be able to find all of the information you need about this annuity, including the good, the bad, and even the ugly. In providing you with the whole picture, though, we feel that this is really the only way that you will be able to make a well-informed buying decision.

In many cases, when financial or insurance salespeople are offering annuities, they will paint a nice and rosy picture of how the annuity offers the opportunity for growth, as well as protection of principal. But, in their presentation, they may also conveniently leave out some of the primary details about the annuity that could be considered as drawbacks. So, before you start the process of moving a large chunk of your hard-earned retirement savings into this annuity, it is best to learn the whole story first.

In order to be perfectly clear here, though, we want to convey that we believe there are many great benefits to owning an annuity – provided that it fits in with your overall financial plan. Given that, it is not only wise to know just exactly what you are committing to, but also to know why you would be choosing one particular annuity over a whole host of other possibilities.

This annuity review is here so that you can better understand the “fine print” as it relates to the Principal Preferred Series Annuity. With that in mind, after you have read through it, you will have a clear picture as to whether or not it is the best annuity for you.

So, if you are ready to get started, let’s go ahead and dive in!

The Principal Preferred Series Annuity at a Glance

Product NameMyGuarantee Plus
IssuerLincoln Financial Group
Type of ProductFixed Deferred Annuity
S&P RatingAA- (Lincoln National Life Insurance Company)
Phone Number(888) 916-4900

Opening Thoughts on the Principal Preferred Series Annuity

The Principal Financial Group (often simply referred to as The Principal) is a global financial investment management leader that is headquartered in Des Moines, Iowa. Founded in the late 1800s as an insurance company, The Principal has grown and expanded exponentially over the years.

As a member of the Fortune 500, Principal (as of the third quarter of 2017) holds approximately $655 billion in total assets under management and has brought in roughly $1.8 billion in net income as of September 30, 2017.

Because so many people are living longer these days, it is essential to ensure that you have income during your early stages of retirement, as well as many years down the road. In fact, it’s not uncommon for people to live for 20, 30 or more years past their retirement date.

With so much volatility and unpredictability in the stock market over the past several years, the demand for annuities has grown quite a bit, particularly as a way for retirees to ensure that they will have the income to last throughout the remainder of their lifetime.

Unfortunately, though, due to the historically low-interest-rate environment that we’ve been stuck in for nearly a decade now, the return that has been offered by fixed annuities has been very low.

In many cases, the return that is obtained through a fixed annuity is not really even enough to outpace the average rate of inflation – and because of that, your purchasing power in the future could suffer.

How The Principal Describes the Preferred Series Annuity

According to the Principal’s website, the Preferred Series Annuity can provide you with the flexibility to choose between either a higher interest rate or a guaranteed return of premium. So, the annuity can essentially be “customized” for best fitting your specific needs.

This financial vehicle also allows you to make optional additional premium payments during the first year. With this product, you’ll have a guaranteed interest rate for three, four, five, six, or seven years. Then, once this initial rate guarantee period has ended, you have the choice of whether you want to withdraw the money from the annuity (without being subject to surrender charges), or alternatively, you could automatically renew again into the same or a different rate guarantee period.

Depending on how much you contribute to the annuity, you could also receive a premium credit – which in turn, can help you to reach your retirement savings goals faster, based on the larger amount of principal to build upon.

This annuity offers some other “bells and whistles,” like the option of choosing between the return of premium or a higher rate of interest. So, if you know that you (or your heirs) won’t need to access this money for a while, then you could earn at a higher rate.

For more in-depth details about the Principal Preferred Series Annuity, you can check out the company’s product brochure HERE.

How an Insurance or Financial Advisor Might “Pitch” this Annuity

Given our longer lifespans these days, the worry about running out of retirement income in the future is a very real fear for many retirees. Therefore, the ability of annuities to provide a guaranteed lifetime income is one of the key reasons that these products have grown in popularity – particularly over the past several years.

Because of that, if you have been presented the Principal Preferred Series annuity by an insurance or financial advisor, it is likely that they have keyed in heavily on the income guarantee, as well as the fact that your principal will be safe, and that you can be guaranteed a set interest rate for a certain number of year.

But, while having such assurances can definitely help you with sleeping better at night, the truth is that the interest rates today – as well as for the past decade or so – that are being offered on fixed annuity products are painfully low. And because of that, you could really run the risk of not being able to beat – or even to meet – future inflation.

Why does that matter so much?

Well, even though you won’t “technically” be losing money per se, the loss to your future purchasing power could mean that you’ll need to cut back on buying some of the items and services you’ll need in the future.

What Fees are There for this Annuity?

While you can purchase the Principal Preferred Series annuity with no up-front or annual sales charges, don’t let that lull you into believing that there are no costs at all associated with this product.

This is particularly the case if you decide to withdraw 15% or more of the annuity’s initial contract value for that year during its surrender charge period. In the case of this particular annuity, the time frame that you’ll be subject to surrender charges corresponds with the length of the interest rate guarantee period that you have chosen. So, this is a tradeoff of sorts in that, while you can count on a set rate of interest for a period of time – regardless of what is occurring in the market – your money will also essentially be “locked in.”

Principal Preferred Series Annuity Surrender Charge Schedule

Guarantee Period / Years12345678910+

In addition to that, making such withdrawals prior to you turning age 59 ½ could also subject you to an additional 10% IRS “early withdrawal” penalty. So, it could be that you won’t get out very much if you end up withdrawing funds from the annuity before retirement.

Independent Review of the Principal Preferred Series Annuity

The Annuity Gator’s End take on the Principal Preferred Series Annuity

Where it works the best:

Although the Principal Preferred Series annuity may not be the right solution for everyone, it could be a viable option for those who are seeking the following benefits:

  • An interest rate guarantee – at least for a certain period of time
  • Safety of principal
  • Guaranteed income for life

Where it works the worst:

On the other hand, this particular product may not be a good choice for those who:

  • Need or want to access their principal within the surrender period
  • Want the opportunity to earn a higher rate of return
  • Do not plan to use the lifetime income feature

In order to really get a good idea of how you can best compare annuities in order to determine which one may be right for you,  to instantly download our free annuity report.

In Summary

There are a lot of variables that need to be considered before you purchase a long-term financial vehicle like an annuity. So before you lock into a product that may or may not work in conjunction with your overall financial needs and goals, you need to think about several key criteria, such as how the money in the annuity will grow, and how the income from the product will ultimately pay out.

If you are still strongly considering the Principal Preferred Series annuity, then you can definitely be assured that your principal will be safe and that you will also be able to count on an income stream for the remainder of your life.

However, that being said, you also need to consider some additional factors. In fact, the only way to truly know how this annuity will work for you and your specific financial situation is to have it tested.

We can perform this testing for you, and we will do so for you at no cost or obligation. If this is something of interest to you, then please just simply let us know that by contacting us here via our secure online contact form.

Still Have Any Questions? Did You Happen to Notice Any Mistakes in this Review?

While we realize that this annuity review was somewhat lengthy, our feeling is that we would much rather provide our website visitors with a tad bit “too much” information as versus not enough. That’s because you really need to have as many details as possible in order to make a well-informed annuity buying decision.

With that in mind, if you found that this annuity review was beneficial for you, then please feel free to share it and to forward it on to anyone else that you think would also benefit from it.

We also know that the information about annuities and other financial related products can, and oftentimes does, change. So, if you happened to notice any details in this annuity review that need revising or updating, then please also let us know that, too, and our team of annuity “geeks” will correct it.

Any other annuity products that you’d like to have us review?

If so, great!

Just simply provide us with the name or names of these annuities and we will get to work on adding these reviews to our website.


The Annuity Gator

Independent Review of the Principal Preferred Series Annuity