as red zone

A Critical Time in Your

Investment Life

I N V E S T I N G F O R T H E T I M E O F Y O U R L I F E SM

Welcome to the Retirement Red Zone —SM

IFS-A111949 Ed. 08/2006

• New Retirement Challenges

• What Is the Retirement Red Zone?

• What Investment Setbacks in the Red Zone Can Do to Your Plans

• Lessons Learned From Today’s Retirees

• A Solution Offering Protection, Growth, and Guaranteed Lifetime Income

Today We’ll Cover —

Welcome to the Retirement Red Zone2


VARIABLE ANNUITIES:

ARE NOT FDIC INSURED MAY LOSE VALUE

ARE NOT BANK OR CREDIT UNION GUARANTEED

• Social Security“Social Security Still Needs Fixing”

— The Boston Globe, October 12, 2005

• Pensions“The $354 Billion Pension Problem”

— CNN Money.com, October 27, 2005

• Health Care“No Quick Cure for Health Care System”

— InformationWeek, October 24, 2005

• Longevity“Aging Population Complicates U.S. Retirement”

— The Miami Herald, September 26, 2005

You Are Facing New Retirement Challenges



Longevity: A Good News, Bad News Story



What Is the Retirement Red Zone?



Retirement

In the Red Zone, Time Is Not on Your Side


$308,000($15,400/yr)

This chart is hypothetical and one example of the returns an investor theoretically could experience during a given period, and it is not intended to depict past or future performance of a variable annuity or subaccount within a variable annuity. If this were an actual example, various costs would be factored into the gross return, including annual insurance and administrative charges of the annuity, annual contract charges, investment management fees of the variable subaccounts, the cost for any optional features, and any other applicable fees.

$212,058($10,602/yr)

This example is hypothetical and is for illustrative purposes only, and it is not meant to represent the performance of any particular investment. It assumes a 7% average annualized return on a $250,000 value rounded to first decimal. The various columns are intended to demonstrate the impact of the sequence of returns assuming 5% annual withdrawals of $12,500 (increasing at 3% annually for inflation). Past performance does not guarantee future results. If this were an actual variable annuity, various costs would be factored into the gross return, including annual insurance and administrative charges of the annuity, annual contract charges, investment management fees for the variable subaccounts, the cost for any optional features, and any other applicable fees.

Sequence of Returns: It Can Be Hard for a Portfolio to Recover From Early Losses


This chart is for illustrative purposes only and is not indicative of the performance of any investment or annuity product. Index returns assume reinvestment of all distributions and do not reflect product fees, expenses, or sales charges, which would lower the performance shown. You cannot invest directly in an index. The time period shown is not a realistic investment horizon for retirement saving. While the chart demonstrates that long-term exposure to equity markets may yield a positive return, past performance is not a guarantee of future results.

Could a Market Decline Coincide With Your Retirement Timing?

Source: © 2005 Ibbotson Associates, Inc. Used with permission. All rights reserved.


Lessons Learned From Today’s Retirees


Most important goals:

• 45% maintain standard of living

• 40% avoid being a financial burden

Retirement spending expectations:

• 40% would like to keep most of their savings intact

Source: Prudential Financial, “2004 Survey of Recent Retirees,” March 2004.


• Fearful

• Unconcerned

• Overconfident

There Is No Time for Red Flag Behavior in the Red Zone



What Choices Do You Have?



• Reduce downside risk in declining markets

• The ability to capture the market’s upside

• Guaranteed lifetime retirement income, without giving up control of your savings

What Should an Effective Retirement Investment Offer?



Introducing Variable Annuities From American Skandia


• Guaranteed income stream for life

• Types of protection with living and death benefits

• Choice of professionally managed investment accounts

• Tax-deferral

• Fees and surrender charges


• Growth guarantees: Provides Protected Withdrawal Value based on:

— 5% annual compounded growth of account value for the first ten years from benefit election date or first withdrawal, if sooner

— Highest anniversary value for the first ten years from benefit election date or first withdrawal, if sooner

— Account value at time of first withdrawal

A Variable Annuity With Lifetime Five: Helps Take Some of the Risk Out of Your Retirement



• Income guarantees:— 5% guaranteed income for life

— 7% guaranteed for at least 14.2 years

• Available for an additional cost

How Lifetime Five Works

The hypothetical illustration includes the following assumptions: (i) fund expense of 1.24% (which reflects the cost of the AST Capital Growth Allocation Portfolio available for use in conjunction with Lifetime Five; (ii) Lifetime Five charge of 0.60%; and (iii) M&E and Administrative Charges of 1.65% (which reflects the charge of the ASL II deferred variable annuity). The other annuity products and investment portfolios may contain different expenses. Hence, the values illustrated would then also be different. Guarantees are dependent on the claims-paying ability of the issuing company.

Barbara’s Protected Withdrawal Value of $452,871 provides a guaranteed income of:$22,644 for life(5% X $452,871)

or $31,701 for 14.2 years(7% x $452,871)

$500,000

$450,000

$400,000

$350,000

$300,000

$250,000

$200,000

$150,000

$100,000

$50,000

Gross Rate of Return

<<Date of firstwithdrawal

Acc

ount

Val

ue

$452,871

$407,224

$334,709

$176,920


Highest Anniversary Value (HAV)

5% Annual Compounded Growth

Account Value

Average Annual Return

0% Return Scenario

(assuming no withdrawals)

---

Changing Jobs or Retiring: What Are Your Options?

• Leave assets in your former employer’s plan

• Transfer assets to a new employer’s plan

• Cash out (take a lump-sum distribution)

• Rollover IRA



A Good Choice for Qualified Plan Assets

• Help reduce downside risk in declining markets

• No immediate tax consequences or penalties

• A wider array of investment choices



All ratings are as of 2/16/2006. Ratings are intended to reflect the financial strength or claims-paying ability of the American Skandia Life Assurance Corporation and are not intended to reflect the investment performance or financial strength of the variable accounts, which are subject to market risk. Ratings are not a guarantee of the future financial strength and/or claims-paying ability of a company.

American Skandia, a Prudential Financial company


A.M. Best Company

A+

(Rank 2 of 15)

Superior ability to meet ongoing obligations to policyholders

Fitch Ratings

AA

(Rank 3 of 24)

Very strong capacity to meet policyholder and

contract obligations

Standard & Poor’s

AA–

(Rank 4 of 21)

Very strong financial security characteristics

A Rock Solid Reputation for Innovation

Are your eyes open to the Retirement Red Zone?



Investors should consider the contract and the underlying portfolios’ investment objectives, risks, charges, and expenses carefully before investing. This and other

important information is contained in the prospectuses, which can be obtained by contacting your financial

professional. Please read the prospectuses carefully before investing.

Prudential Financial, its distributors, and their respective representatives do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Please consult your own independent adviser as to any tax, accounting, or legal statements made herein.

Tax deferral is already provided by a qualified plan, such as a 401(k). For an additional fee, the annuity provides a guaranteed death benefit and the ability to receive lifetime income.

Asset allocation does not guarantee a profit or protect against loss; however, a properly diversified portfolio can help manage the volatility of your returns and may better position your investments to capture performance as asset classes rotate in favor.

Lifetime Five and Spousal Lifetime Five may not be available in every state and may not be elected in conjunction with certain optional benefits. See the prospectus for more detailed information.

Early withdrawals may be subject to surrender charges. Partial or complete withdrawals of taxable amounts will be subject to ordinary income tax and, if prior to age 591/2, may result in an additional 10% federal income tax penalty. Withdrawal from an annuity generally has the effect of reducing the death benefit, any living benefits, and cash surrender value.

Payments of guaranteed principal and income, as well as living and death benefit guarantees, are contingent upon the claims-paying ability of the issuing company. Guarantees do not apply to the investment performance or safety of the underlying subaccounts in the variable annuity. Optional living and death benefits are available for an additional fee and may not be available in all states.

Variable annuities are for retirement purposes and are subject to market fluctuation, investment risk, and possible loss of principal.

Annuity contracts contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. Your licensed financial professional can provide you with costs and complete details.

American Skandia annuities are issued by American Skandia Life Assurance Corp. and distributed by American Skandia Marketing, Incorporated, both located in Shelton, CT. Both are Prudential Financial companies, and each is solely responsible for its financial condition and contractual obligations. Indirectly through subsidiaries, Prudential Financial, Inc. owns 38% and Wachovia owns 62% of Wachovia Securities LLC. Prudential Financial and the Rock logo are registered service marks, and the Retirement Red Zone and Investing for the Time of Your Life are service marks of The Prudential Insurance Company of America and its affiliates.

Lifetime Five is issued on Form RID WB (11/04) and Spousal Lifetime is issued on Form END-JLT5(3/06) .

VARIABLE ANNUITIES:

ARE NOT FDIC INSURED MAY LOSE VALUE

ARE NOT BANK OR CREDIT UNION GUARANTEED

WO# 06-0486 IFS-A111949 ORD03615 ED. 8/2006 19550-11042005


Are your eyes open to the Retirement Red Zone?


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