Fidelity Investments has announced a series of Retirement Income Solutions for the growing population of individuals who choose to keep their savings in a previous employer’s retirement plan.
According to a press release, Fidelity’s first in-plan retirement solution is “designed to be part of an employer’s retirement lineup and combines digital tools, mutual funds and a cash withdrawal strategy to help workers transition retirement savings into a durable income stream.”
Fidelity’s new Retirement Income Solutions includes three core components: a digital end-user experience, a customizable cash flow withdrawal strategy, and a suite of dedicated retirement income funds. More specifically:
1. Digital experience and tools provide individuals with a platform to evaluate and compare various withdrawal strategies and select the option that best suits their needs.
2. Fidelity Managed Retirement Funds are a set of mutual funds designed to be part of an employer’s 401(k) or 403(b) plan fund lineup for retirees. The funds, which provide an age-appropriate asset allocation mix that becomes more conservative over time, are designed to complement a withdrawal and payment process that help to deliver a sustainable income stream in retirement.
3. The Fidelity Managed Cash Flow withdrawal strategy is designed to complement the Fidelity Managed Retirement Funds, as well as model various systematic withdrawal payment options, and aims to provide a steady income payment strategy for individuals while maintaining a balance throughout their retirement. Payout rates increase over time and are updated annually.
The Fidelity Managed Retirement Funds are designed to be part of an employer’s retirement plan fund lineup and used by investors at or nearing retirement who plan on withdrawing money from their retirement savings.
The Fidelity Managed Retirement Funds are available now, while the digital experience (which includes the online planning tool) will be available in early 2020. Fidelity Managed Cash Flow and the digital experience are available at no extra cost to Fidelity 401(k) and 403(b) clients, though there are expenses associated with the Fidelity Managed Retirement Funds.
