Fidelity Annuities Review
Fidelity Investments is a leader in the financial services sector. The company opened for business in 1946, and this long history makes Fidelity a leader in the annuities industry. Fidelity was the first annuities company to offer internet-based wealth management. We chose Fidelity Investments as one of our top picks among the best annuity companies.
- Low-fee transfers
- Rebalance or trade without penalties
- Several annuities choices
- Multiple convenient funding methods
- Excellent customer service
- High initial investment for some annuities
Types of Fidelity Annuities
Fidelity offers six primary annuities. Our chart explains the basics about each product: Fidelity Personal Retirement Annuity, New York Life Premier Variable Annuity – P Series, Deferred Fixed Annuity, Deferred Income Annuity, New York Life Clear Income Fixed Annuity – FP Series, and Immediate Fixed Income Annuity.
|Product & Minimum Investment||Primary Benefit||Highlights||Best Use|
|Fidelity Personal Retirement Annuity
|Tax-deferred retirement savings||Choice of 3 investment strategies||Retirement savings and asset accumulation|
|New York Life Premier Variable Annuity–P Series
|Guaranteed initial investment return after 10 years||Returns potentially outpace inflation||Retirement savings while protecting the initial investment|
|Deferred Fixed Annuity
|Guaranteed return rate for a fixed period||Fixed interest first 3 to 10 years||Retirement savings and asset accumulation|
|Deferred Income Annuities
|Guaranteed lifetime income beginning at a future date||Increase future income with additional payments during the deferral period||Transitioning to retirement and asset protection|
|New York Life Clear Income Fixed Annuity – FP Series
|Guaranteed lifetime income with access to emergency funds||Fixed rate first 7 years, annual 5% increase on guaranteed lifetime income first 10 years||Transitioning to retirement and asset protection|
|Immediate Fixed Income Annuity
|Guaranteed lifetime income stream||Plus-1 coverage and cost of living adjustment available||Generating income while in retirement|
Annuity Exchanges with Fidelity Investments
If you have an annuity and want to switch to Fidelity Investments, you can take advantage of the low-fee exchange process. An annuity exchange, also known as a 1035 exchange, allows for the tax-free transfer of funds held in a life insurance policy or annuity contract into a new annuity with Fidelity Investments.
You might consider exchanging annuities if:
- Your current provider charges higher fees compared to Fidelity
- You want more contemporary annuity investment options
- You have other investments with Fidelity and wish to consolidate with one brokerage
Talk with your financial adviser to see if switching your annuity from your current provider to Fidelity is right for you.
Fidelity Annuities Cost
Depending on which Fidelity annuity you choose, you need at least $5,000 to invest. All annuities have annual fees, interest, and early withdrawal fees, and Fidelity fees are generally average to low. The Personal Retirement Annuity fees are around 0.25%, but if you invest $1 million or more, that cost drops to 0.10%. The New York Life fixed annuity fee is 0.75%, and New York Life Premier Variable Annuity charges 1.90%.
Some annuities have surrender fees, and the IRS may be expecting taxes paid on withdrawals, but income grows tax-deferred. Be sure to read the fee schedule for the specific annuity you are considering. It’s a good idea to talk to a financial planner or visit the IRS website to learn about annuity taxation.
How to Buy Fidelity Annuities
Contact a Fidelity investment professional by phone or in person at a local Fidelity Investments Center. You can find the number and office locations on the website. Alternatively, you can use the online form to get in touch with a representative to discuss your financial goals and find out which Fidelity annuity would work best for you.
The account representative will talk you through the process of choosing a plan, completing a contract, and making annuity payments. Before you buy, be sure you have a clear understanding of the pros and cons of annuities to determine if it’s your best option for retirement savings.
Fidelity Annuities Complaints
Although most of the online reviews we found give Fidelity Investments stellar ratings, that’s not the case across the board. NerdWallet awards the company 5 out of 5 stars, mainly because Fidelity offers comparatively low fees and a wide selection of funds to choose from to build your annuity portfolio. Reviews on ConsumerAffairs give Fidelity Annuities an average of 3.9 out of 5 stars, where consumers noted exceptional customer service and convenient ways to fund annuities. Some complained about withdrawals not being easy to do, but others said they had no problem with withdrawals after the cutoff date.
The Better Business Bureau rates the entire Fidelity Investments company (not only annuities) a C-, primarily because of 38 unresolved complaints on the site. Fidelity only scores 1 out of 5 stars with consumers leaving reviews on the BBB, and complaints focus on the difficulty of withdrawing funds and closing accounts. On the flip side, ConsumersAdvocate’s Fidelity Annuities Review rates the company a 10 out of 10, with perfect scores for annuity features, reputation, financial strength, and low fees and commissions.
Fidelity Annuities Q&A
How can I learn more about each of Fidelity’s annuity plans?
You can find an overview of each annuity on Fidelity’s website, and you can download a PDF with detailed information for each one.
How can I fund an annuity from Fidelity Investments?
After making your initial contribution, you can take advantage of Fidelity Automatic Annuity Builder to automatically transfer funds from a checking or savings account. You set the amount to transfer, one or more annuities to contribute to, and whether transfers should occur monthly, quarterly, semiannually, or annually.
Do Fidelity representatives sell on commission?
Fidelity employees receive bonuses or commissions for selling annuities, as is the case with most annuity companies. Online reviews suggest agents do a good job taking care of customers, but commissions can sway recommendations. We suggest you talk to a third party financial advisor before buying an annuity.
When is the best time to purchase a Fidelity annuity?
You can purchase an annuity at any time: early in your career while saving for retirement, in midlife when actively planning for retirement, or while already living in retirement. The best annuity for you depends on your current stage of life and when you need to begin receiving payments.
Are Fidelity annuities FDIC-insured?
The Federal Trade Commission does not insure annuities from any company because these financial instruments are based on life insurance and not deposits. If Fidelity became insolvent, annuity payments might not be guaranteed. However, Fidelity has a longstanding solid financial record with over $3,803.8 billion in retirement assets under the company’s administration. If you need an option that is FDIC-insured, consider Fidelity’s certificates of deposit (CDs) to protect assets from market volatility with a guaranteed rate of return.
What other investment services does Fidelity offer?
Fidelity Investment offers full investment, financial, and retirement planning services. The company sells mutual funds, including funds requiring a low investment amount to open, bonds, and CDs. Fidelity also sells and administers retirement accounts, IRAs, life insurance, college savings plans, long-term care insurance, and exchange-traded funds (ETFs). Other offerings include managed brokerage accounts, self-directed online trading, sector investing, cash management, and credit cards.
Annuities can be a vital part of retirement planning, and Fidelity’s low-fee annuities can increase your retirement income. Fidelity Investments is a full-service brokerage where you can manage your annuity investments yourself or with help from a pro alongside your other financial accounts.