Fidelity Investments Launches Guaranteed Income Direct to Help Workers Convert 401(k) and 403(b) Savings Into Annuities at Retirement

• New Digital Solution Provides Workers with Flexibility to Choose Amount of Pension-Like Retirement Payments
• Guaranteed Income Direct Expands Fidelity’s Suite of Retirement Income Products

Fidelity Investments today announced Guaranteed Income Direct, a retirement income product that allows individuals to convert a portion of their 401(k) or 403(b) savings into an annuity to provide consistent, pension-like payments¹ throughout retirement. With nearly eight million workers² on Fidelity’s workplace savings platform nearing retirement, Fidelity’s Guaranteed Income Direct addresses the growing interest³ among employers and employees for a guaranteed income annuity option that is connected to the company’s retirement savings plan and provides direct access to guaranteed income products.

The increasing demand for annuities as a retirement savings distribution option is driven by several factors. First, as a growing number of employers⁴ feel increasingly comfortable having workers keep their savings within the company’s savings plan when they retire, employers feel a greater responsibility to offer their employees the ability to turn some, or all, of their retirement savings into a reliable source of steady income. In addition, recent research⁵ indicates that 78% of workers are interested in putting some of their retirement savings into an investment option that would guarantee them monthly income when they retire and help ensure they don’t outlive their savings. Lastly, the passage of the SECURE Act has reduced the fiduciary risk for employers and made it easier for them to provide annuities as a retirement plan distribution option.

“Shifting from saving for retirement to living in retirement is one of the biggest transitions a person will make in their lifetime, and one of the top challenges facing individuals during this transition is how to ensure that they have enough predictable income to cover their essential expenses,” said Keri Dogan, senior vice president, Retirement Solutions at Fidelity. “Our new Guaranteed Income Direct product provides employees with a simplified option to use their retirement savings plan assets to create their own personal pension and provide them with a steady, reliable stream of income to help cover their expenses in retirement.”

Fidelity’s Guaranteed Income Direct enables employers to provide their workers with a straightforward option of an immediate income annuity, with institutional pricing and offered by the insurer of their choice, that is combined with support and digital tools to help workers determine the amount of guaranteed income that is right for them. Individuals have the flexibility to convert any amount of their retirement plan savings, regardless of where their money is saved (mutual funds, etc.) to guaranteed retirement income, based on their personal needs. Any savings that are not converted to an annuity can remain in the workplace savings plan. The entire experience is integrated with Fidelity’s employee benefits portal, which also includes education and support from Fidelity to help employees as they consider their options.

Guaranteed Income Direct is the latest addition to Fidelity’s growing portfolio of products and solutions for employers to help their employees transition from saving for retirement to living in retirement. Fidelity’s retirement income products are designed to help all employees develop a retirement income strategy, regardless of their level of savings, including multiple offerings that seamlessly integrate into a company’s workplace savings platform. Additional details can be found at http://go.fidelity.com/RIS.

“Fidelity recognizes that each investor is unique, and individuals will approach retirement in their own way. Our broad portfolio of retirement income products and solutions is designed to provide workers with the flexibility and tools they need to build a retirement income plan that is tailored to their situation and can help meet their specific retirement income needs,” continued Dogan.

Scheduled to launch for select clients in the first half of 2022, Fidelity Guaranteed Income Direct will have broad availability in the second half of 2022.

About Fidelity Investments

Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $11.1 trillion, including discretionary assets of $4.2 trillion as of September 30, 2021, we focus on meeting the unique needs of a diverse set of customers: helping more than 38 million people invest their own life savings, 22,000 businesses manage employee benefit programs, as well as providing more than 13,500 wealth management firms and institutions with investment and technology solutions to drive growth. Privately held for 75 years, Fidelity employs more than 52,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about-fidelity/our-company

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.

Annuity guarantees are subject to the claims-paying ability of the issuing insurance company.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.

Fidelity Brokerage Services LLC, Member NYSE, SIPC 900 Salem Street,

Smithfield, RI 02917

Fidelity Distributors Company LLC, 500 Salem Street,

Smithfield, RI 02917

National Financial Services LLC, Member NYSE, SIPC

245 Summer Street, Boston, MA 02110

1005001.1.0

© 2021 FMR LLC. All rights reserved.

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¹ Annuity guarantees are subject to the claims paying ability of the issuing insurance company. In a defined benefit pension plan, pensions are guaranteed by the employee’s employer unless the employer transferred the liability to a third-party insurance company. Also, unlike pensions, annuities must be purchased and have associated costs and expenses.

² Internal information based on Fidelity 401(k) and 403(b) participants ages 50-64, as of September 30, 2021.

³ Edelman Data and Intelligence (DxI) conducted the online survey on behalf of Nationwide July 19-August 4, 2021.

⁴ Fidelity Investments Survey, May 2017.

⁵ Based on 744 responses as part of the Employee Benefits Research Institute’s 2021 Retirement Confidence Survey.

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