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Deferred Income Market Expands: Lower Initial Premium for Guaranteed Future Income Annuity Makes it More Accessible for Gen X and Gen Y

New Product Feature Offers Those in Their 20s, 30s and 40s the Opportunity to Create a Pension-Like Stream of Income Within an IRA

NEW YORK, April 15, 2013 — New York Life today announced that the initial premium payment for its Guaranteed Future Income Annuity1 (GFIA), a flexible way to generate lifetime income in the future, has been lowered to $5,000 from $10,000. The change allows those who fund their IRA annually to use their contribution to create a secure retirement income.

Earlier this year, New York Life announced that the GFIA had exceeded $1 billion in premiums since its July 2011 introduction.

“Our Guaranteed Future Income Annuity established a new retirement income market for pre-retirees who want to turn their retirement assets into a lifetime stream of income when they retire. We believe this new lower initial premium payment will open up this proven way to fund retirement to Gen Xers and Gen Yers who may already be making regular IRA contributions,” said Matt Grove, senior managing director, New York Life. “Funding GFIA through an IRA contribution combines the tax benefits of an IRA with the pension-like guaranteed lifetime income of an income annuity.”

Younger workers are least likely to have a defined benefit plan. In fact, in 2010 only 9.6 percent of family heads under age 45 working in the private sector had a DB plan.2 For those without a DB plan, contributing the maximum to their IRA each year is a prudent financial step because it can reduce taxable income while helping prepare for financial needs in retirement. With recent changes to the GFIA, those who want to use their IRA to create a pension-like stream of income can now do so.

Here's how it works: a 37 year-old male purchases a GFIA with a $5,000 IRA contribution and continues to contribute $5,000 annually. When he retires at age 67, he will receive over $19,000 annually for the rest of his life. If a 27 year-old male makes annual $5,000 IRA contributions to a GFIA, at age 67 he will receive over $33,000 a year for the rest of his life.3

In 2013, the maximum dollar amount that can be put into an IRA each year increased to $5,500 from $5,000 in 2012. The maximum amount increases with inflation so GFIA policyholders have the potential to purchase even more retirement income over time.

New York Life Insurance Company, a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States4 and one of the largest life insurers in the world. New York Life has the highest possible financial strength ratings currently awarded to any life insurer from all four of the major credit rating agencies: A.M. Best (A++), Fitch (AAA), Moody's Investors Service (Aaa), Standard & Poor's (AA+).5 Headquartered in New York City, New York Life's family of companies offers life insurance, retirement income, investments and long-term care insurance. New York Life Investments6 provides institutional asset management and retirement plan services. Other New York Life affiliates provide an array of securities products and services, as well as retail mutual funds. Please visit New York Life's website at www.newyorklife.com for more information.

1 Issued by New York Life Insurance and Annuity Corporation (NYLIAC), a wholly-owned subsidiary of New York Life. Available in jurisdictions where approved. Guarantees are subject to contract terms, exclusions and limitations, and the claims-paying ability of NYLIAC. This contract has no cash surrender value and no withdrawals are permitted prior to the income start date. Income payments are guaranteed at least as long as the annuitant is living provided the annuitant is alive on the designated income start date. Contracts in which a Life Only payout option is selected do not provide a death benefit either prior to or after the designated income start date. Clients should consult their own tax advisor regarding their specific situation.

2 Source: EBRI estimate based on the Survey of Consumer Finances, Federal Reserve Board, 2010.

3 Life with Cash Refund option, as of March 29, 2013. Annuity payments consist of both interest and return of premium. Payout rates are subject to change and may vary depending on premium amount, age, gender, income option selected, and interest rates in effect at policy issue.

4 Based on revenue as reported by “Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual),” Fortune magazine, May 21, 2012. See http://www.money.cnn.com/magazines/fortune/fortune500/2012/faq/ for methodology.

5 Source: Individual Third Party Ratings Reports as of 2/1/13.

6 New York Life Investments is a service mark used by New York Life Investment Management Holdings LLC and its subsidiary, New York Life Investment Management LLC.

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