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Prudential Annuities Review

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This review was produced by SmartAsset based on publicly available information. The named firm and its financial professionals have not reviewed, approved, or endorsed this review and are not responsible for its accuracy. Review content is produced by SmartAsset independently of any business relationships that might exist between SmartAsset and the named firm and its financial professionals, and firms and financial professionals having business relationships with SmartAsset receive no special treatment or consideration in SmartAsset’s reviews. This page contains links to SmartAsset’s financial advisor matching tool, which may or may not match you with the firm mentioned in this review or its financial professionals.

Prudential Financial, Inc. started in 1875 as a mutual insurance company selling only burial insurance. Today, it's the second largest insurance company in the country (based on net premiums written), serving individual and institutional clients around the globe. The Fortune 500 company has made retirement its central business, divesting itself of its healthcare division and acquiring the life insurance and annuity businesses of such companies as The Hartford and American Skandia. In addition to annuities and life insurance, Prudential offers mutual funds and financial planning services. It has $1.648 trillion in assets under management (AUM), and its shares trade on the New York Stock Exchange (ticker symbol: PRU).

If you’re trying to decide whether a Prudential annuity is right for you, consider speaking with a financial advisor in your area.

Annuity Fees Annuity Type Minimum Initial Premium More Information
PruSecure® Fixed Indexed Annuity Find an Advisor

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  • No annual contract fees
Fixed indexed annuity $10,000

Annuity Type

Fixed indexed annuity

Minimum Initial Premium

Prudential Fixed Annuity with Daily Advantage Income Benefit Find an Advisor

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  • No annual contract fees
  • 0.95 annual rider fee
Fixed annuity $25,000

Annuity Type

Fixed annuity

Minimum Initial Premium

Prudential Premier® Investment Variable Annuity B Series Find an Advisor

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  • Lesser of $50 or 2% of your account value annual fee
  • 0.48% account value based insurance charge
  • 0.18% death benefit fee
  • Investment portfolio operating fees ranging from 0.31% to 2.34%
Variable annuity $10,000

Annuity Type

Variable annuity

Minimum Initial Premium


An annuity's guarantee of lifetime income is only as good as the issuer's financial strength. The second-largest insurer in the U.S. (based on net premiums written), Prudential has strong financial strength ratings. A.M. Best gave it an A+ (fifth highest of 19 ratings) and Standard & Poor’s gave it an AA- (fourth highest of 21). The company has also received grades of Aa3 from Moody's and AA- from Fitch.

PruSecure® Fixed Indexed Annuity

The PruSecure® Fixed Indexed Annuity is a single premium annuity, which means you make one initial payment. The annuity offers two ways to grow your money: with a fixed interest rate and with a rate that tracks a stock index (up to a cap). You allocate as much as you wish to each crediting strategy.

Your fixed account will grow according to a set interest rate. For the indexed account, you have four optionsto follow: the S&P 500 Index, MSCI EAFE Index, Dow Jones U.S. Real Estate Index or Bloomberg Commodity Index. However, your money isn't actually in the stock market. Instead, Prudential says it will pay you a rate that tracks these indices.

Depending on what works best for you, Prudential will let you pick between a five- and seven-year withdrawal charge schedule. If you think you’ll need money sooner rather than later, choose the five-year period; if you can hold off on withdrawals in exchange for higher rates, then the seven-year period is the better choice.

Prospective annuitants must be 85 years old or younger and have $10,000 available to invest. The latest age at which you’re allowed to annuitize your contract is 95.


There are no annual fees associated with the PruSecure Annuity from Prudential. However, if you withdraw more than 10% of your account’s value, you’ll be subject to the following fees that are dependent on what term length you select.

Withdrawal Fee Schedule
Term Length Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8+
5 Years 9% 9% 8% 7% 6% 0%    
7 Years 9% 9% 8% 7% 6% 5% 4% 0%

The tax rules surrounding retirement accounts like annuities are simple. If you withdraw from your account before you reach age 59.5, you’ll pay a 10% penalty in addition to applicable income taxes.

Realistic Return Expectations

As of Feb. 2021, Prudential offers a 1.00% and 1.05% fixed interest rate on the five- and seven-year withdrawal terms, respectively. For the indexed account, rate caps range from 2% to 6% for the five-year term and 2.05% to 6.25% for the seven-year term. Participation rates range from 10% to 14% for the five-year term and 12% to 16% for the seven-year term.

Prudential Fixed Annuity with Daily Advantage Income Benefit

Like any fixed annuity contract, the Prudential Fixed Annuity with Daily Advantage Income Benefit is built to earn you interest on a sum of money for a given number of years. It works a lot like a certificate of deposit (CD), only it grows tax-deferred like most retirement-centric accounts.

This contract comes with a little extra boost called the Daily Advantage Income Benefit, which comes at an extra cost. Through this, your future income will grow. In turn, the longer you wait to annuitize, the larger your income base will become. This feature comes with a 5.75% annualized growth rate that's divided up so it applies on a daily basis.

The minimum initial premium for this product is $25,000, and the maximum issue age is 85.


Like most fixed annuities, the Prudential Immediate Income Annuity has no recurring contract or investment-related fees. However, the Daily Advantage Income Benefit comes with a 0.95% annual fee.

You are allowed to withdraw up to 10% of your contract's value each year without incurring extra fees. If you surpass that limit, withdrawal charges will apply, and they last for seven years. Rates start at 7% and fall by 1% annually, until the contract is over.

If you use qualified money and you are younger than 59.5, payments will also be subject to a 10% IRS penalty, as well as ordinary income taxes.

Realistic Return Expectations

The Prudential Fixed Annuity with Daily Advantage Income Benefit comes with a 1.00% fixed interest rate. With the help of the Daily Advantage Income Benefit, though, your future income will continue to grow at an annualized rate of 5.75%.

Prudential Premier® Investment Variable Annuity B Series

If you’re looking to merge investing and retirement planning into a single product, the Prudential Premier® Investment Variable Annuity B Series is a solid option. There are plenty of funds to invest in through the company, with options spanning the entire risk tolerance spectrum.

Some funds focus on fixed-income securities, while others are centered around stocks and other asset allocations. Goldman Sachs Asset Management, JP Morgan, BlackRock and Massachusetts Financial Services Company are a few of the managers of these funds.

For those who want to pay up for an upgraded death benefit, Prudential can oblige. For an extra fee, its Return of Purchase Payments Death Benefit will pay your beneficiary the greater of the sum of your purchase payments minus any withdrawals or taxes or the unadjusted account value on the day the company receives proof of death. Otherwise, the standard death benefit pays your contract’s value adjusted for any withdrawals. Both benefits apply only should you die before you annuitize.


The annual contract fee for this annuity is variable, meaning you’ll be charged the lesser of $50 or 2% of your account value. The entire charge is waived, though, if your total purchase payments equal $100,000 or more. Furthermore, being that this is an investment-centric contract, you’ll pay anywhere from 0.31% to 2.34% in investment portfolio operating expenses. Prudential also charges a 0.48% annual account value based insurance charge, as well as a 0.18% death benefit fee if you subscribe to the optional rider.

You can withdraw up to 10% of each purchase payment you make every contract year. Anything beyond this limit will be subject to withdrawal fees.

Withdrawal Fee Schedule
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6+
7% 7% 6% 6% 5% 0%

To avoid a possible 10% early withdrawal penalty from the IRS, wait until you turn 59.5 to take out money from your contract.

Realistic Return Expectations

As their name indicates, variable annuities have unpredictable returns. In other words, the investments you select and the amount of money you allocate to each will determine what you’ll make over the long term.

Tips for Planning Your Retirement

  • A financial advisor can be a great partner in setting up a retirement income plan. To find an advisor who understands your needs, use SmartAsset’s free matching tool. In five minutes, it will link you to up to three advisors, based on your preferences. Get started now to achieve your financial goals.
  • Do you know how your retirement savings compare to the nest eggs of other Americans in your age group? Knowing the U.S. average for retirement savings may spur you to sock away more. You should also consider your retirement income needs and see whether you’re on pace to meet those needs, using our retirement calculator.

All information is accurate as of the writing of this article.

Best Places for Small Business Owners

SmartAsset analyzed data to find the best places for small business owners in the country. This interactive map shows the best counties for small business owners in the U.S. and in each state. Zoom between states and the national map to see the top spots in each region. Also, scroll over any county to learn about that region's small business statistics.

Rank County Small Business Returns Small Business Income Income Taxes

Methodology Which places are best for small businesses owners? To answer this question, we considered three factors: the proportion of people in a county with small business income, how much business income those people reported and the amount of tax a potential resident must pay on their income.

To determine how attractive a region is for small business owners, we compared the number of tax returns that report small business income compared to the total tax-filing population of the region. Next, we compared the total amount of small business income to the overall amount of income reported in each region.

Small businesses are typically incorporated as pass-through entities, meaning that the business owners pay income taxes on the company profits rather than the company itself paying income tax. Because of this, income taxes can play a major role in determining the financial success of a given small business. To determine income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes for each location.

These three factors were then indexed and equally weighted to yield our small business index. Places with the highest small business index are the places which ranked the highest in the study.

Sources: Internal Revenue Service (IRS), US Census Bureau 2018 American Community Survey, Government Sources, SmartAsset