Fidelity Investments.
Guaranteed Income Estimator

What are fixed income annuity characteristics?

A fixed income annuity turns a portion of your savings into consistent income payments made to you for the rest of your life (or for a set period of time for period certain annuities). In order to provide an income stream, you generally have no or limited access to assets. With a fixed income annuity you can:

  • Help cover your essential expenses
  • Provide lifetime income stream for you or you and a spouse
  • Help provide protection for your beneficiaries
  • Help manage risk over market volatility
  • Choose whether you want income to start now, or at a future date

Additionally, an income annuity offers tax advantages that vary based on what type of funds you use to purchase your annuity. If you use:

  • Pre–tax sources – like your IRA rollover or 401(k) – you can fund an annuity with money without triggering any immediate tax consequences. Taxes will be incurred only as you receive income payments.1
  • After tax–sources – like mutual funds or stocks – a portion of your income payment will be considered a return on your original investment and will be tax–free.2
  • Roth IRA assets – your income payments will be tax–free for life.1
  • Exchanges – if you own a deferred annuity or life insurance policy you can make a tax–free exchange3 of these assets into an income annuity.

  1. Before purchasing an annuity with 401(k) or IRA assets, you should evaluate how the annuity and 401(k) or IRA compare with respect to options, benefits, and fees.
  2. Transfers may trigger taxes on long– and short–term capital gains, you should consider the consequences of liquidity on assets in your taxable accounts.
  3. Before exchanging, check with your current provider to see if it will assess a surrender charge, and also consider the existing benefits and features you may lose in an exchange.