Annuity
WHAT ARE ANNUITUES?
How tax-deferred annuities may help you save for retirement.
If you are already saving as much as you can in your 401(k) or IRA,1 you can use this type of annuity to boost your retirement savings. Like any tax-deferred investment, earnings compound over time, providing growth opportunities that taxable accounts lack. Deferred annuities have no IRS contribution limits, so you can invest as much as you want for retirement. You can also use your savings to create a guaranteed stream of income. Depending on how annuities are funded, they may not have required minimum distributions (RMDs).
Withdrawals of taxable amounts from an annuity are subject to ordinary income tax. If you make withdrawals before age 59½, you may be subject to a 10% IRS penalty. Annuities also come with annual charges not found in mutual funds, which will affect your returns.
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Deferred fixed annuities differ from CDs in that:
• Annuities are not FDIC-insured
• If you make withdrawals before age 59½, you may be subject to a 10% IRS penalty
• Deferred fixed annuities may offer more access to assets than a CD
• Annuity earnings compound on a tax-deferred basis
Investing in a variable annuity involves the risk of loss.
Before investing, consider the investment objectives, risks, charges, and expenses of the annuity and its investment options. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
Investing in a variable annuity involves the risk of loss - investment returns and contract value are not guaranteed and will fluctuate.
Guarantees apply to certain insurance and annuity products and are subject to product terms, exclusions, and limitations and the insurer's claims-paying ability and financial strength.
1. Each individual's situation is unique and therefore seeking additional guidance from a tax advisor is suggested. Although variable annuities offer tax-deferral, if you are considering one to fund a qualified retirement plan or IRA, you should do so for the variable annuity's features and benefits other than tax deferral. In such cases, tax deferral is not an additional benefit of the variable annuity. References throughout this material to tax advantages, such as tax deferral and tax-free transfers, are subject to this consideration.
2. Insurance companies reserve the right to limit contributions.
3. The maximum Surrender Charge is 7% year 1 and 2, 6% year three, 5% year 4, 4% year 5, 3% year 6, and 2% year 7. After 7 years there is no surrender charge.
4. The rider does not protect the account value from day-to-day market fluctuations or against losses that could be realized before the completion of the holding period. That means the rider will not provide a benefit if the policy is not held for the entire holding period after it is elected or reset. Withdrawals reduce the rider's guaranteed amount proportionally, which may be more than the actual dollar amount withdrawn; so the rider is not intended for clients who anticipate taking substantial withdrawals (including IRS required minimum distributions) before the completion of the rider holding period.
5. The lifetime withdrawal benefit amount is available after the youngest annuitant turns age 59½.
6. Any withdrawal prior to age 59½ will reduce the GLWB amount. After age 59½, an early access withdrawal or any withdrawal (including applicable MVA and surrender charges) that exceeds your GLWB amount will reduce income guarantees.
7. Deferred Income Annuity contracts are irrevocable, have no cash surrender value, and no withdrawals are permitted prior to the income start date.
Fidelity insurance products are issued by Fidelity Investments Life Insurance Company (FILI), 900 Salem Street, Smithfield, RI 02917, and, in New York, by Empire Fidelity Investments Life Insurance Company®, New York, N.Y. FILI is licensed in all states except New York. Other insurance products available at Fidelity are issued by third-party insurance companies, which are not affiliated with any Fidelity Investments company. A contract's financial guarantees are subject to the claims-paying ability of the issuing insurance company.
Product availability and features may vary by state. Please refer to the contract prospectus for more complete details regarding the living and death benefits.
