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Immediate fixed income annuities can provide you with predictable income payments for life or a set period of time. You simply convert a portion of your assets into ongoing payments that will not be affected by market movements. Using additional assets, you can also purchase a feature—commonly referred to as a Cost of Living Adjustment (COLA)—that will increase your payments each year to help your income keep pace with inflation.
A number of factors go into calculating your income payments, including your age, gender, and the purchase amount applied to the annuity. You can use Fidelity's Guaranteed Income Estimator to estimate a payment or call 800-493-3004 for a personalized quote.
An income annuity payment is similar to a systematic withdrawal plan in that both can provide payments on a specific schedule. The difference is that only an income annuity can guarantee* income for the rest of your life. A systematic withdrawal plan allows you access to assets and gives you the ability to stop or start payments at any point during the payout period. There is a risk, however, that income could run out, depending upon how the underlying investments perform and the amount of the withdrawal.