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.