Exchange your annuity

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

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

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.2 Note: An annuity cannot be exchanged for a life insurance contract.

Low fees can make a big difference

The Fidelity Personal Retirement Annuity® (FPRA) is our low-cost, tax-deferred variable annuity. Here are some important points to consider when exploring an FPRA:

  • Annual annuity charge of just 0.25% (0.10% for contracts purchased with an initial investment of $1 million or more3). Fund fees also apply.
  • More of your money goes to helping you reach your investment goals.
  • 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.
  • Before exchanging, check with your current provider to see if they 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.

Hypothetical example: Impact of lower annual annuity charges on account value

Impact of lower annual annuity charges on account value

The chart above assumes a $100,000 investment. These projections are based on a hypothetical 6% rate of return less a 0.25% low-cost annual annuity charge, and a 6% rate of return less a 1.05% annual annuity charge, which is the national industry average annual charge as of 12/31/22, according to data on non-group open variable annuities from Morningstar, Inc. The hypothetical 6% rate of return is equivalent to a 5.74% net annual rate of return for the low-cost tax-deferred variable annuity, and a 4.89% net annual rate of return for the national industry average tax-deferred variable annuity. Investments that have the potential for a 6% annual rate of return also come with the risk of loss. This rate of return is not guaranteed. For year-by-year details, see disclosure 4 below.

This hypothetical chart is not intended to predict or project investment results. Your actual rate of return may be higher or lower than that shown in the chart above. Federal, state and local taxes, inflation, and fund transaction fees have also not been taken into account; if they had, returns would have been lower.

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View a sample report (PDF)

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.

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