Fidelity to Launch 2027 Retirement Fund With Lifetime Annuities as 3% Tax Rate Favors Annuitization
Updated
Updated · asiae.co.kr · Jun 27
Fidelity to Launch 2027 Retirement Fund With Lifetime Annuities as 3% Tax Rate Favors Annuitization
2 articles · Updated · asiae.co.kr · Jun 27
Summary
Early 2027 is the target for Fidelity Freedom Lifetime, which will let workers convert part of a target-date fund balance in retirement accounts into income paid until death.
Nationwide and New York Life will supply the annuity component, extending Fidelity’s traditional target-date strategy from pre-retirement asset buildup into post-retirement income planning.
The structure is aimed at reducing longevity and market-withdrawal risk for retirees who might otherwise draw directly from savings during downturns or outlive their assets.
A new flat 3% tax rate on lifetime annuity income, applied regardless of age starting this year, adds policy support for annuitization over lump-sum or fixed-period payouts.
Analysts still note trade-offs: lifetime annuities can start with lower payouts and offer less flexibility for lump-sum access or inheritance, reinforcing calls for more customized payout designs.