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How Fidelity Manages Income Replacement FundsSM

Most mutual funds are designed to help you prepare for retirement, with the goal being to set aside money each month in order to build up your savings. Fidelity Income Replacement FundsSM are very different. Instead of saving for retirement, these funds are managed to help you live in retirement. Instead of putting money away each month, you take money out. And instead of trying to build your savings up, the goal is to take your account down to $0.

If you’re like most people, when it’s time to retire you will not have saved enough money to live entirely off the interest and dividend income generated by your savings. That means you’ll have to withdraw a portion of your total savings each month in order to have enough money to cover your living expenses. For many investors, calculating the right withdrawal amount can be difficult. Withdraw too much each month and you run the risk of your savings running out. Withdraw too little and you may not have enough to cover your expenses. Then there’s the question of how you invest the remaining money in your account.

The goal of Fidelity Income Replacement Funds is to eliminate all those questions. You dedicate a portion of your savings to a fund, then choose either a monthly withdrawal amount or a set number of years that you’d like to receive regular withdrawals and an initial amount to invest.

Bridge income
You can use a Fidelity Income Replacement Fund as a bridge to cover expenses until other income sources become available or until you become eligible to take qualified withdrawals from a 401(k). You can also use a Fidelity Income Replacement Fund to postpone receiving Social Security or pension payments. This may allow future Social Security or pension payments to grow larger.

Extra income for early retirement
Many people use their first years of retirement to do things they’ve always wanted to do, like travel. A Fidelity Income Replacement Fund can help turn a portion of your income into monthly payments that can be used for a wide range of lifetime pursuits.

Supplemental long-term income
Use a Fidelity Income Replacement Fund to generate a long-term stream of income to cover retirement expenses. For as long as you own your fund, you maintain total control of your assets.


Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information.  Read it carefully.

Each income replacement fund's investment objective is intended to support a payment strategy through the Smart Payment Program (“SPP”).  Monthly payments may not keep pace with inflation, will fluctuate year over year and will result in the gradual liquidation of an investment in the fund by its horizon date. As with any mutual fund, withdrawals will reduce the investment balance and future returns are not earned on amounts withdrawn. The funds and SPP may not be appropriate for all investors.  Please consult the fund's prospectus for more details

Performance of the Fidelity Income Replacement Funds depends on that of their underlying Fidelity funds. These funds are subject to the volatility of the financial markets in the U.S. and abroad and may be subject to the additional risks associated with investing in high yield, small cap and foreign securities.

Please note, the Fidelity Income Replacement Funds and the Smart Payment Program may not be appropriate for all investors. Investors who own a Fidelity Income Replacement Fund within a tax-advantaged retirement account and who elect to participate in the Smart Payment Program should consult with their tax advisers to discuss tax consequences that could result if payments are distributed from their core account prior to age 59 ½ or they plan to use the Smart Payment Program, in whole or in part, to meet their annual minimum required distribution.  You should consult a financial adviser or Fidelity representative to determine whether a Fidelity Income Replacement Fund is right for you.