Prudential Financial IRA Overview
Prudential is a well-established financial company known for investment management, insurance, and other financial products. Founded in 1875, Prudential is a Fortune 500 and Global Fortune 500 company. It has received a 100% rating from the Human Rights Campaign's Corporate Equality Index and has been named one of the ‘100 Best Companies for Working Mothers’ and one of the ‘Best Places to Launch a Career’. The company has also awarded over $450,000 in Prudential CARES Volunteer Grants to 444 volunteer groups worldwide.
Prudential Financial, headquartered in Newark, New Jersey, is a Fortune 500 company listed on the New York Stock Exchange (NYSE: PRU). With more than 49,000 employees across 40 countries, Prudential offers services including insurance, wealth management, fund management, and retirement plan solutions. As of Q3 2017, Prudential managed nearly $1.3 trillion in assets and held $3.7 trillion in gross life insurance.
Prudential IRA Options
Prudential offers several IRA options, including:
| Minimum | Maximum |
|---|
| Roth IRA | No Minimum | $5,500/year |
| Traditional IRA | No Minimum | $5,500/year |
| SEP IRA | No Minimum | 25% of compensation (up to $52,000) |
| SIMPLE IRA | No Minimum | $12,000 (under age 50) or $14,500 (over 50) |
| Rollover IRA | No Minimum | No Limit |
They provide a standard selection of IRA accounts, including SIMPLE, Traditional, Rollover, Roth, and SEP IRAs. The ‘catch-up’ contribution limit for Roth and Traditional IRAs is $1,000 per year, and $2,500 per year for SIMPLE IRAs.
Prudential IRA Fees
Prudential’s fees are in line with those of other investment firms. There is an account maintenance fee of $15.00 and an annual fee of $15.00, both of which can be waived if the IRA balance exceeds a certain amount. There are no additional fees associated with Prudential IRAs.
Planning
Prudential offers extensive retirement planning resources. To open an IRA, investors can work with a financial advisor to choose the right account and investments. Prudential also provides a retirement planning calculator for estimating retirement needs and an in-depth IRA guide that explains the features of various IRAs and how each one affects retirement savings.
Availability
Prudential has a mobile site that allows investors to view their accounts, research investments, and access retirement and investment planning guides. However, the mobile site does not allow active management of investments.
Website Usability
Prudential’s landing page is modern and user-friendly. It provides a snapshot of the account’s value, year-to-date performance, and an estimated retirement income chart. This simple view contains most of the information a customer needs for a quick account check.
Exploring further reveals a range of options and information for managing the account. Users can view current and past performance of available funds, helping them choose funds that match their investment style.
Individual performance pages include fund prospectuses, manager information, and fund objectives, providing valuable information for making informed investment decisions.
The only downside is that some parts of the Prudential website, like the performance page, appear outdated, with designs that look like they were last updated in the early 2000s.
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Customer Service
Prudential’s customer support is available Monday through Friday from 8 AM to 9 PM ET via phone. For retirement counseling and planning, investors can contact the IRA Brokerage Service during these hours. Customer support is also accessible through email or in-person during regular business hours. Prudential’s representatives are responsive and professional.
Security
Prudential offers top-tier security for its clients. They use advanced software to encrypt sensitive information and employ various privacy and verification protocols to prevent unauthorized access to accounts.
Performance
Prudential’s performance has been reviewed in light of the costs associated with their services. The review included 49 strategies with at least three years of performance history, comparing them against their respective Morningstar benchmarks.
- 55% (27 of 49 funds) underperformed their benchmarks or did not survive since inception.
- 45% (22 of 49 funds) outperformed their benchmarks, delivering a positive alpha.
- 2% (1 of 49 funds) consistently outperformed their benchmarks, providing a 95% confidence level that the outperformance is sustainable rather than random.
On average, an investor in an equity strategy from Prudential experienced a 1.21% expense ratio, a 0.84% 12b-1 fee, a 5.50% max front load, and a 3.86% max deferred load for strategies with these fees. Similarly, a fixed-income strategy had an average 0.83% expense ratio, a 0.47% 12b-1 fee, a 4.06% max front load, and a 5.00% max deferred load. These costs can significantly impact an investor’s accumulated wealth if not backed by strong performance.
Top Alternatives
Prudential IRA Review Verdict
A deep analysis of Prudential’s performance shows that active management is likely to fall short for most investors. This is likely due to market efficiency, costs, and increased competition in the financial services sector. As always, a more reliable investment strategy is to buy, hold, and rebalance a globally diversified portfolio of index funds.
Updated on 7/2/2024.
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