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Exchange Your Annuity

If you own an annuity outside Fidelity, a tax-free exchange to Fidelity Personal Retirement Annuity®1, a deferred variable annuity, could make sense for you.

Exchanging may help you take advantage of lower fees and our professionally managed investment solutions—both of which may help you accumulate more for retirement. In addition, you will not incur any taxes2 on the exchange.

Having your assets with one company is an added benefit, as it can be easier to review and manage your entire portfolio.

What is an annuity exchange?

An annuity exchange is also known as a 1035 exchange, which refers to a provision in the tax code. The process allows for the direct exchange of accumulated, tax-deferred funds in a cash-value life insurance policy or annuity contract to another annuity contract, without incurring taxes at that time on the gains in your current contract. Note: An annuity cannot be exchanged for a life insurance contract.

Before exchanging, check with your current provider to see if it will assess a surrender charge. You should also consider the existing benefits and features you may lose in an exchange, which may be of particular importance in poor market conditions.

Low fees can make a big difference

Fidelity Personal Retirement Annuity® is a low-cost,3 tax-deferred variable annuity available through Fidelity. It has an annual annuity charge of just 0.25% (0.10% for contracts purchased with an initial investment of $1 million or more4), which means more of your money goes to helping you reach your investment goals. Fund fees also apply.

Unlike many competitor annuities, Fidelity Personal Retirement Annuity does not have a guaranteed minimum death benefit. It's important to note that a low-cost annuity may not offer all of the benefits and features of a higher-cost annuity. Consider all aspects of an annuity carefully before deciding to exchange.5

Fidelity does not charge a fee for facilitating an annuity exchange.

Next steps

Call 800-544-4936
to take advantage of our free Annuity Cost Comparison Report, which
compares the costs and features of a current annuity you may own
to the low-cost Fidelity Personal Retirement Annuity.
View a sample report (PDF).

Call to buy or learn more

From our experts

1. Fidelity Personal Retirement Annuity (Policy Form No. DVA-2005, et al.) and, for New York residents, Personal Retirement Annuity (Policy Form No. EDVA-2005, et al.). Fidelity Brokerage Services, Member NYSE, SIPC, and Fidelity Insurance Agency, Inc. are the distributors.
2. Taxes are not incurred when exchanging annuities, as long as the exchange is in compliance with section 1035 of the Internal Revenue Code.
3. According to 12/31/13 data on non-group open variable annuities from Morningstar, Inc., at 0.25% Fidelity Personal Retirement Annuity's annual annuity charge is significantly lower than the national industry average 1.33% annual annuity charge. Underlying fund fees also apply.
4. Contracts purchased with an initial purchase payment of $1 million or more will qualify for a reduced annual annuity charge of 0.10% (the initial purchase payment is the amount applied to the contract on the contract date).
5. Before exchanging, check with your current provider to see if it will assess a surrender charge, and also consider the existing benefits and features you may lose in an exchange, which may be of particular importance in poor market conditions.
6. The year-by-year pre-tax account values for the low-cost VA at the 5.74% and -0.25% (0% less 0.25% annual annuity charge) net annual rates of return shown above are: $105,735/$99,750 for year 1, $111,799/$99,501 for year 2, $118,211/$99,252 for year 3, $124,990/$99,004 for year 4, $132,158/$98,756 for year 5, $139,737/$98,509 for year 6, $147,751/$98,263 for year 7, $156,225/$98,017 for year 8, $165,184/$97,772 for year 9, $174,658/$97,528 for year 10, $184,674/$97,284 for year 11, $195,265/$97,041 for year 12, $206,464/$96,798 for year 13, $218,305/$96,556 for year 14, $230,824/$96,315 for year 15, $244,062/$96,074 for year 16, $258,059/$95,834 for year 17, $272,859/$95,594 for year 18, $288,507/$95,355 for year 19, and $305,053/$95,117 for year 20.
The year-by-year pre-tax account value for the industry average VA at the 4.59% net annual rate of return is $104,590 for year 1, $109,391 for year 2, $114,412 for year 3, $119,664 for year 4, $125,157 for year 5, $130,902 for year 6, $136,911 for year 7, $143,195 for year 8, $149,768 for year 9, $156,643 for year 10, $163,833 for year 11, $171,353 for year 12, $179,219 for year 13, $187,445 for year 14, $196,049 for year 15, $205,048 for year 16, $214,460 for year 17, $224,304 for year 18, $234,600 for year 19, $245,369 for year 20.
Investing in a variable annuity involves risk of loss—investment returns and contract value are not guaranteed and will fluctuate.

Withdrawals of taxable amounts from an annuity are subject to ordinary income tax, and, if taken before age 59½, may be subject to a 10% IRS penalty.

Fidelity insurance products are issued by Fidelity Investments Life Insurance Company (FILI), 100 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. A contract's financial guarantees are subject to the claims-paying ability of the issuing insurance company.

Fidelity Annuity Specialists are licensed insurance agents.

Before investing, consider the investment objectives, risks, charges, and expenses of the annuity and its investment options. Call or write to Fidelity or visit Fidelity.com for a free prospectus and, if available, a summary prospectus containing this information. Read it carefully.

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