Principal Income Protector
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Principal Income Protector sm
Helping Maximize Income for Life
For: AUREL MIHU - 67 Male
Amount: $200,000 @ 3% Interest Now
Gross Income Now: $6,000
Net Income Now: $4,500
Current Tax Rate: 25%
Ten Year Transition Period
Illustration Date: 7/25/2007
Here's How it Works!
Step I:
$80,000 (40%) deposited into Principal Income Annuity (SPIA) for lifetime income, with
ten (10) years minimum, starting in one month.
Step II:
$120,000 (60%) deposited into Principal Guaranteed Fixed Annuity (5 year interest
rate guaranteed period) for increasing income guaranteed for life [1], with ten (10) years
minimum.
Step III:
At beginning of years 2, 3, 4, 5, 6, 7, 8, 9, and 10 transition 10% of the deferred annuity
deposit to guaranteed lifetime income, with ten (10) years minimum. In year 11,
transition the last 10% plus all accumulated interest to lifetime income, with ten (10)
years minimum.
Now - $80,000 to Income Annuity
Beginning of Year 2 - $12,000 to Income
Beginning of Year 3 - $12,000 to Income
Beginning of Year 4 - $12,000 to Income
Beginning of Year 5 - $12,000 to Income
Beginning of Year 6 - $12,000 to Income
Beginning of Year 7 - $12,000 to Income
Beginning of Year 8 - $12,000 to Income
Beginning of Year 9 - $12,000 to Income
Beginning of Year 10 - $12,000 to Income
Beginning of Year 11 - $48,278 to Income
Flexibility At any time prior to a scheduled transition you can tell Principal Life Insurance Company to cancel
or postpone that transition, and the balance of the money in your deferred annuity will continue to
accumulate, tax-deferred, at the current rate (3% minimum). The income annuity deposit and any
money already transitioned to income will continue to generate monthly income for life.
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Principal Income Protector
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Principal Income Protector sm
Helping Maximize Income for Life
For: AUREL MIHU - 67 Male
Deposit Amount -$200,000
Single Annuitant
Total
Pre-tax
Income
Per
Year Year
1:
2:
3:
4:
5:
6:
7:
8:
9:
10:
For
Life:
$6,557
$7,357
$8,178
$9,021
$9,885
$10,770
$11,679
$12,612
$13,570
$14,552
$18,601
Lifetime Income The above income is guaranteed for life with a minimum payout of 10 years for each annual
increase.
Income Tax Exclusion Approximately 62% of these income payments are exempt from Federal Income Taxes until the full
premium has been received tax free. For example, 62% of the $6,557 annual income annuity
payment will be received tax free until the total of those tax free payments equals your income
annuity payment. This would result in a net after tax income of $5,933 from your income annuity
deposit. Each separate annuitization of the deferred annuity is treated in a similar manner. This
assumes that the funds used for this purchase are "nonqualified" funds and that the cost basis is
100% of the deposit.
Principal Income Protector Net Income (1st Year) $5,933
Current Net Income Per Year
$4,500
A 32% Net Income Increase
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Principal Income Protector
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Principal Income Protector sm
For: AUREL MIHU - 67 Male
Helping Maximize Income for Life
Ten Year Minimum Guarantees If death occurs prior to the tenth (10th) year of any annual payment increase, the payment will
continue for the balance of the ten (10) year period. For example, if the annuitant died in the third
(3rd) year, the income payments from years one (1), two (2), and three (3) would continue for seven
(7) years, eight (8) years, and nine (9) years respectively. The balance of the money in the deferred
annuity would be available to the beneficiary for withdrawal or to leave as an asset for future
income.
Income Calculation The following shows the additional income you will receive each year as you transition your
deferred annuity to lifetime income. The increases after the first year are based on guaranteed
minimum income rates and they may be higher if interest rates are higher in the future. If you live in
a state with a premium tax (CA, ME, NV, NY, SD, WV, WY) your results could differ.
Age
67
68
69
70
71
72
73
74
75
76
77
Total Annual
Pre-tax Income
Guaranteed for Life
$80,000 results in an income of: $546.40 per month x 12 = $6,557 / yr. $6,557
$12,000 results in an income of: $66.72 per month x 12 = $801 / yr. $7,357
$12,000 results in an income of: $68.40 per month x 12 = $821 / yr. $8,178
$12,000 results in an income of: $70.20 per month x 12 = $842 / yr. $9,021
$12,000 results in an income of: $72.00 per month x 12 = $864 / yr. $9,885
$12,000 results in an income of: $73.80 per month x 12 = $886 / yr. $10,770
$12,000 results in an income of: $75.72 per month x 12 = $909 / yr. $11,679
$12,000 results in an income of: $77.76 per month x 12 = $933 / yr. $12,612
$12,000 results in an income of: $79.80 per month x 12 = $958 / yr. $13,570
$12,000 results in an income of: $81.84 per month x 12 = $982 / yr. $14,552
$48,278 results in an income of: $337.47 per month x 12 = $4,050 / yr. $18,601
Not FDIC/NCUA Insured No Bank Guarantee
Not A Deposit
May Go Down In Value
Not Insured By Any Federal Government Agency
[1]
Guarantees based on the claims paying ability of Principal Life Insurance Company.
Tax-qualified retirement arrangements, such as IRAs, SEPs, and SIMPLE-IRAs are tax-deferred. You derive no additional
benefit from the tax deferral feature of the annuity. Consequently, an annuity should be used to fund an IRA, or other tax
qualified retirement arrangement, to benefit from the annuity's features other than tax deferral. These features may
include guaranteed lifetime income, guaranteed minimum interest rates, and death benefits without surrender charges.
Annuities issued by Principal Life Insurance Company, a member of the Principal Financial
Group, Des Moines, IA 50392
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