What Will We Cover in this Annuity Review?In this annuity review, we will be going over the following information about the Fidelity Personal Retirement Variable Annuity:
- Product type
- Current rates
- Realistic long-term expectations
- How it is used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.For those who have been considering the purchase of an annuity because they are seeking tax-advantaged growth of savings and the opportunity for market-linked growth, as well as the guarantee of a future income in retirement, then the Fidelity Personal Retirement Variable Annuity could be a good option for you. However, before going out and making a commitment on this – or any – annuity, it is recommended that you first have a good understanding of just exactly how this product works so that you know what to anticipate. Annuities are complex products, and the more “bells and whistles” they offer, the more confusing they tend to be. Because of that, many consumers aren’t really sure what they are purchasing – only to find out after they’ve purchased that the product really isn’t all that it was cracked up to be. Unfortunately, at that point, it is too late to get out of the annuity without having to pay a substantial withdrawal fee. This is definitely not the way to grow and/or protect your hard-earned savings. That’s where we come in!
Annuity and Retirement Income Planning Information You Can Actually TrustIf you have never been to our website before, please allow us first welcome you here to AnnuityGator.com. We encompass a team of experienced and knowledgeable financial professionals who focus on providing highly informative and unbiased annuity reviews. While you may have noticed other similar websites on your quest for annuity information, we’ve actually been offering annuity product reviews for many years – far longer than most of the other copycat sites. (Although, it has been said that imitation is the highest form of flattery). It is possible that your present insurance or financial advisor has offered you the Fidelity Personal Retirement Annuity (FPRA). Or, you could have recently gone to an annuity seminar where, in return for a free dinner or lunch, a presenter provided you with details about this, or some other similar annuity. But, even though you may feel like the presenter left you “well informed,” it is still extremely important that you know more about the entire picture – which includes the good, the bad and the ugly – before you commit what will likely be a large chunk of your retirement savings. In researching annuities online, you may have come across other annuity websites – many of which tout some pretty bold claims about their annuities, such as:
- Highest income payouts
- Low Fees
- Top-rated annuity carriers
Fidelity Personal Retirement Annuity at a Glance
|Product Name||Fidelity Personal Retirement Annuity|
|Type of Product||Variable Annuity|
|Phone Number||(800) 544-3274|
Opening Thoughts on the Fidelity Personal Retirement AnnuityFidelity is a fairly well-known name in the financial arena. Based in Boston, this large financial services company holds (as of September 30, 2017) roughly $6.5 trillion in total customer assets, and services approximately 26 million individual customers for which it transacts more than 1/2 million commissionable trades per day! On the personal investing side, Fidelity provides financial planning and retirement options such as IRAs, managed accounts, brokerage and cash management products, college savings accounts, and retirement annuities – including deferred fixed annuities, immediate fixed income annuities, deferred income annuities, and variable annuities. While variable annuities have taken somewhat of a back seat to other, safer, alternatives like fixed and fixed indexed annuities over the past decade, there is a definite niche for these products – particularly with those who are seeking the opportunity for a higher rate of return, as well as the tax-deferred growth of assets.
Before we get into the gritty details, there are some required legal disclosures here…This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Fidelity Investments has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and/or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners.
How Fidelity Investments Describes the Personal Retirement AnnuityRecognized by Barron’s as a Top Variable Annuity, the Fidelity Personal Retirement Annuity (FPRA) is a low cost deferred variable annuity that allows you to save more for retirement on a tax-deferred basis. In fact, Fidelity Investments describes the Personal Retirement Annuity as a retirement vehicle that may be appropriate for investors who are wanting to increase their tax-deferred retirement savings beyond the contribution limits of an IRA or 401(k), with the ability to invest in a wide range of investments including equity, bonds, and asset allocation funds. This variable annuity offers more than 55 different fund choices – many of which are rated with either 4 or 5 stars by Morningstar. With this annuity, you can also have a range of diversification options in that you could choose to go with a single-fund strategy, build your own portfolio, or create your own industry sector investing approach. In addition, because the FPRA has an auto re-balancing feature, you are able to keep your investments in line with your objectives, without having to continuously watch over the money in the contract in order to do so. The annuity also offers a standard death benefit whereby you can name a beneficiary to receive the funds in the case of death. You could also opt to transfer the funds to a charity tax-free. More in-depth details are available via the FPRA product brochure – HERE.
How an Advisor Might Go About “Pitching” this AnnuityGiven its diverse array of investment options, it is likely that a financial advisor would “pitch” the Fidelity Personal Retirement Annuity as a financial vehicle that offers diversity, along with the ability to obtain market-related returns. These, in turn, could help your money to keep pace with rising inflation over time – which is something that fixed annuity products are not typically able to do. There is also the ability to diversify the holdings to best fit your particular needs and risk tolerance, given its more than 55 investment options. And, with the various investment strategies, you can be as hands-on, or as hands-off, as you want to be. It is also possible that an advisor would tout the lifetime income feature on this annuity. Yet, while this is all well and good, variable annuities are not necessarily known for being the best alternative for generating lifetime income. While you can obtain a stream of income for life, oftentimes, due to the risk to the insurance company involved, these products end up only generating the same amount of income – or less – than safer options such as fixed annuities. That being the case, would you really want to endure sleepless nights wondering what the market is going to do, and worrying that your hard-earned principal could be lost before you retire? Annuities can be confusing products – and because of that, it is important that you know what you’re getting into, and you know what questions you should ask before moving forward. With that in mind, if you would like some additional tips on what you need to know before buying an annuity, just simply click here so that you can immediately access our free report on how to shop for an annuity.
What About the Fees on the Fidelity Personal Retirement Annuity?Although Fidelity states that it has eliminated the expensive riders and other insurance options found in many annuities – such as a guaranteed death benefit – in order to keep the fees low on this annuity, don’t let that fool you into thinking that you won’t be subject to any fees at all. Variable annuities have been long considered to be riddled with charges and fees, and the Fidelity Personal Retirement Annuity is no exception. In this case, there is a 0.25% fee for contracts that are purchased with an initial investment of less than $1 million (or that have not yet accumulated $1 million). For contracts that are purchased with an initial investment of $1 million (or those that have accumulated $1 million or more), there is a 0.10% fee. Also, as with most other variable annuities, you’ll also be charged any of the applicable fund fees from the investment options that you choose.
The Annuity Gator’s End Take on the Fidelity Personal Retirement Annuity (FPRA)Where this annuity works the best:
- For those who are looking for the opportunity to attain market-related growth
- For those who are seeking lifetime income
- For those who are seeking a way to diversify their assets
- For those who wish to obtain additional tax-deferred growth and have already maxed out their 401(k) and IRA options
- For those who have a low-risk tolerance
- For those who do not intend on using the lifetime income feature