Principal Deferred Income Annuity Review

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As individuals approach retirement, their goals change from saving to turning that savings into a guaranteed income stream to last throughout retirement. With people living longer than ever, fewer employers offering defined benefit plans and an uncertain future for Social Security, many retirees are now responsible for creating their own retirement income from their personal savings.

With a Principal Deferred Income Annuity, you have the opportunity to build your own guaranteed retirement income stream to last throughout your life.

Map Our Your Retirement Income Plan

You’re working hard to plan and save for retirement. As you think about this important milestone, you might be asking yourself:

Have I saved enough?

What if I outlive my savings?

What is the future of Social Security?

How do potentially volatile markets affect my savings?

How can I save more if my employer cuts back or eliminates the pension plan?

How can I create tax-advantaged income?

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With a Deferred Income Annuity, You:

1. Have a flexible premium. After your initial premium payment, subsequent premiums of at least $2,000 can be made any time prior to the Income Start Date, increasing your guaranteed income payment.

2. Can defer income payments anywhere from 13 months to 30 years.

3. Select your Income Start Date at issue — but have the flexibility to make a one-time adjustment, should your retirement plans change.

4. Can choose a payout option that can provide protection for your beneficiaries.

5. Can receive income payments monthly, quarterly, semiannually or annually.

6. Have access to optional riders that allow you to increase your income payments to help keep up with inflation.

7. Get a return of the premium if death occurs during payment deferral period.

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8. Can purchase as a qualified longevity annuity contract (QLAC), allowing you to defer the distributions of a portion of your qualified assets beyond 70½, reducing your RMDs until a later date (maximum age is 85).

Product Description

Premiums

Initial premium minimum: $10,000 Subsequent premium minimum: $2,000 Maximum premium: $2 million (up to $5 million with home office approval) Qualifying longevity annuity contract (QLAC) premium is limited to lesser of $125,000 or 25% of total IRA balances as of prior year end (excluding Roth and Inherited IRAs)

Issue Age

Nonqualified: 0-93 Qualified: 0-68 QLAC: 0-82

Owner/Annuitant

For single life annuity income options, the owner and annuitant must be the same (unless a nonnatural owner) For joint life annuity income options, the owner and annuitant do not need to be the same; however, the owner must be one of the annuitants Joint owners/annuitants must be spouses

Annuity Income Options

Life Only Life with Guarantee Period (not available with QLAC) Life with Cash Refund Life with Installment Refund (not available with QLAC)

Income Start Date

Selected at contract issue Can make a one-time adjustment during the life of the contract (based on the Income Start Date Adjustment guidelines)

Income Payment Deferral Method

Minimum deferral period: 13 months

Maximum deferral period: Nonqualified: Earlier of 30 years or age 95 Qualified: Earlier of 30 years or age 70½ QLAC: Earlier of 30 years or the first day of the month following the owner reaching age 85

Income Payment Frequency

Monthly Quarterly Semiannually Annually

Death Benefit

A death benefit is payable when an original owner (and joint owner if any), dies prior to the income start date. The death benefit will be the total of all premium payments made as of the date of death. After the income payments start, the death benefit will depend on the annuity income option selected.

Income Start Date Adjustment

Prior to the Income Start Date, you may make a one-time change to the Income Start Date

Allows you to accelerate or defer the Income Start Date May accelerate the Income Start Date by up to five years (provided it is no sooner than 13 months after the latest premium payment) May defer the Income Start Date up to five years from the original Income Start Date (must be within the maximum deferral period limits)

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