GUARANTEES

GROWTH FLEXIBILITY

Income Diversification
Creating a Plan to Support Your Lifestyle in Retirement
Contents

Build a Retirement Plan that Can Last

a Lifetime
2 Retirement Is Different Today
4 Preparing for a Long Retirement
6 Weathering the Markets
8 Impact of Withdrawals in Retirement

Creating a Diversified Income Plan

12 Plan Your Lifestyle in Retirement
13 Guarantees: Reliable Income to Cover
Essential Expenses
14 Growth Potential: Build an Investment
Strategy and Remain Disciplined
16 Flexibility: Create Your Diversified
Income Plan
18 Create Your Plan — Your Next Steps
 Build a Retirement Plan that Can
Last a Lifetime
You’ve spent years saving for retirement — investing and planning for your future. Now, it’s
time to put those savings to work. A well-crafted, thoughtful approach to how you spend your
money in retirement is just as important as the thoughtful approach to saving that got you here.

At Fidelity, we believe every investor needs a retirement cash flow strategy to support their
personal retirement vision and lifestyle. Just like a retirement savings plan, a retirement income
plan should be diversified1 to help manage risk while also providing income and growth
potential. Based on your personal situation, we can help develop a plan that offers:

• Guarantees2 to help your retirement plan succeed

• Growth Potential to meet your long-term needs
• Flexibility to refine your plan over time

SAVING FOR TRANSITIONING LIVING IN

RETIREMENT TO RETIREMENT RETIREMENT

Assets

As you approach and enter retirement, there are different risks that you should consider in your
financial planning. This brochure is designed to give you an overview of potential retirement
risks, and then help you create a diversified income plan to help you meet them.

Together, we can help you develop a plan with the right mix of investments to help make sure
you are prepared for retirement.

1
Diversification and asset allocation do not ensure a profit or guarantee against loss.
2
Guarantees apply to certain insurance and annuity products and are subject to product terms,
exclusions, and limitations and to the insurer’s claims-paying ability and financial strength.

INCOME DIVERSIFICATION 1
 Retirement Is Different Today
Today’s retirement lifestyle is more active — and will likely last longer

Your retirement will likely be quite different from that of your parents or earlier generations.
Today’s workers retire earlier, are more active, expect to live longer, and will need to rely more
on personal savings for cash flow. We believe you should create an income plan that will support
your unique lifestyle.

PEOPLE ARE RETIRING EARLIER AND LIVING LONGER

84
81 82
79
77
Average retirement
length in 2010:
25 years
71
68
64
62
59

1930 1950 1970 1990 2010

Life Expectancy of 65-Year-Old Average Retirement Age

Sources: Centers for Disease Control and Prevention — National Center for Health Statistics,
U.S. Census, Bureau of Labor Statistics, and Gallup, as of June 2015.

Q
• How do you envision your lifestyle in retirement?
• How will your retirement be different from prior generations?

2 FIDELITY INVESTMENTS
Funding your retirement is up to you now, but we are here to assist

For generations, retirees have relied on pension plans and Social Security as their primary sources of
income in retirement. Today, fewer workers can count on a pension, and the future of Social Security
is uncertain. Additionally, the cost of health care in retirement is rising — a couple retiring at age 65
is expected to incur $275,000 (in today’s dollars) in health care costs on average during their
retirement years.3

We can help you create cash flow from your personal savings by having a plan that removes some of
the uncertainty, and allows you to move into the next phase of your life with greater confidence you
will have the income you need, for as long as you need it.

RETIREMENT PLAN TRENDS: PARTICIPATION BY PLAN TYPE

Distribution of private sector active worker participants, 1979–2011

80%

70% 69% of workers

62% have a defined
60% contribution plan
and no pension
50%

40%

30%
22% 24%
20%

10% 16%
7%
0%
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011

Defined Benefits (Pension) Defined Contribution Both Defined Benefits and Defined Contribution

Sources: U.S. Department of Labor, Form 5500 Summary Report; Employee Benefit Research Institute (EBRI) estimates, as of June 2015.

2017 Fidelity analysis performed by its Benefits Consulting group. The estimate is based on a hypothetical couple retiring in 2017,
3

65 years old, with life expectancies that align with Society of Actuaries’ RP-2014 Healthy Annuitant rates with Mortality Improvements
Scale MP-2016. See page 20 for more information.

Q
• How were you compensated during your working years? How will
that change in retirement?
• What is your current plan to replace your paycheck while living
in retirement?

INCOME DIVERSIFICATION 3
 Preparing for a Long Retirement
Impact of longevity

With quality of life enhancements and access to health care, among other improvements, Americans
are living longer. As a consequence, you will need to determine an appropriate investment strategy
that balances the need for growth and the desire to preserve capital. There are risks to being too
conservative and potentially allowing inflation to affect your plan, and, conversely, of being too
aggressive and inviting volatility. Without some thoughtful planning, you risk potentially outliving your
assets, otherwise known as longevity risk.

LIFE SPANS CAN BE LONGER THAN EXPECTED

65-year-old man 65-year-old woman 65-year-old couple*

50% Chance 87 years 90 years 94 years

25% Chance 93 years 96 years 98 years

*At least one surviving individual.

Source: Society of Actuaries RP-2014 Mortality Table projected with Mortality Improvement Scale MP-2014 as of 2016.
For illustrative purposes only.

Q
• What planning have you done to prepare yourself for a long retirement?
• What do you need to do to ensure that you do not outlive your assets?

4 FIDELITY INVESTMENTS
Impact of inflation

Imagine how inflation might affect the buying power of your money over time. In the short term, you
may see incremental price increases, but the collective impact over a longer period of time could be
significant. As you build your income plan, it’s important to include some investments with income
growth potential that may help keep up with inflation through the years. A well-rounded retirement
income plan balances guaranteed income sources with investments that provide growth potential.

HYPOTHETICAL EXAMPLE: INCREASING COSTS

Future cost
after inflation

Current cost
$150,000
$133,292
4% Inflation
$50,000

$100,000 $104,689
3% Inflation

$50,000
$82,030
2% Inflation

$0
Today 5 years 10 years 15 years 20 years 25 years

Source: Fidelity Investments. All numbers were calculated based on hypothetical rates of inflation of 2%, 3%, and 4%
(historical average from 1926 to 2016 was 3%) to show the effects of inflation over time. This hypothetical example is
for illustrative purposes only. It is not intended to predict or project inflation rates. Actual inflation rate may be
higher or lower than those shown here.

Q
• How will the impact of inflation affect your spending power in
retirement?
• How important is it to grow your portfolio to maintain your lifestyle
throughout retirement?

INCOME DIVERSIFICATION 5
 Weathering the Markets
Investing through market volatility

Market declines are one thing while you’re still working, have an income source, and are still saving
for retirement. But they can be devastating when you’re relying on what you’ve saved to last the rest
of your life. While many investors approaching retirement today may be more comfortable investing
conservatively as a result of market volatility, they could be missing growth opportunities.

HOW MARKET VOLATILITY CAN TRIGGER EMOTIONAL REACTIONS

2200

2000

1800 Economic Recovery

Tech Bubble Financial Crisis

1600
Housing Bubble
Sept. 11
S&P 500® Index

1400
9/11
1200

1000

800

600

400
1996 2001 2006 2011 2016

S&P 500® over 20 year period

Source: Fidelity Investments, December 31, 2016.

Past performance is no guarantee of future results.
The S&P 500® Index is a market capitalization–weighted index of 500 common stocks chosen for market size, liquidity, and industry
group representation. S&P and S&P 500 are registered service marks of Standard & Poor’s Financial Services LLC.

Q
• How have your investment beliefs changed in response to
market volatility?
• How has that experience influenced your investment decisions?

6 FIDELITY INVESTMENTS
 Plan for market volatility

While there is no question that market volatility can be unsettling, history suggests that the market
is able to recover from intra-year declines — providing investors the potential for positive returns. Over
the past 37 years, the S&P 500® Index had a positive annual return over 84% of the years, even with
an average max intra-year decline of 13%. You need to be prepared to weather intra-year declines
and plan for market volatility.

S&P 500 ® INDEX ANNUAL TOTAL RETURNS AND MAX INTRA-YEAR DECLINES: 1980–2016

50%
40%

30%

20%

10%

0%
Annual Total Ret
–10%
Max Intra-Year D
–20%

–30%

–40%

–50%

–60%
1980

1985

1990

1995

2000

2005

2010

2016

Annual Total Return

Annual Total Return Max Intra-Year Decline
Max Intra-Year
Past performance Decline
is no guarantee of future results. It is not possible to invest directly in an index. Returns are based
on index price appreciation and dividends. Max intra-year declines refer to the largest index drop from a peak to a trough
during the calendar year. Not intended to represent the performance of any Fidelity fund or strategy. For illustrative pur-
poses only. Data as of 12/31/2016.
Source: Standard & Poor’s, Bloomberg Barclays.

Q
• How does market volatility influence your investment strategy?
• How important is it to remain disciplined during periods of
2010 2000

2016 2005

2010

2016

market volatility?

INCOME DIVERSIFICATION 7
 Impact of Withdrawals in Retirement
Making your money last

It’s important to remember that retirement can last a long time, and that you are actually planning for
different stages and needs along the way. How much you withdraw, especially early in retirement, can
have a dramatic impact on how long your money may last.

WITHDRAWING TOO MUCH TOO SOON

Withdrawals are inflation adjusted.*
Withdrawals are inflation adjusted.*
$2,000,000
$2,000,000

$1,500,000
$1,500,000
of Portfolio
of Portfolio

$1,000,000
Value Value

$1,000,000

$500,000
$500,000

$0
65 70 75 80 85 90 95 100
Age
$0
Withdrawal Rate65 70
4% 75
5% 80
6% Age
85
7% 90 95 100

Withdrawal Rate 4% 5% 6% 7%
*Hypothetical value of assets held in a tax-deferred account after adjusting for monthly withdrawals and performance. Initial investment
of $500,000 invested in a portfolio of 50% stocks, 40% bonds, and 10% short-term investments. Hypothetical illustration uses historical
monthly performance, from Ibbotson Associates, for the 35-year period beginning January 1972: stocks, bonds, and short-term invest-
ments are represented by the S&P 500 ® Index, U.S. intermediate-term government bond, and U.S. 30-day T-bills, respectively. Initial
withdrawal amount based on 1/12th of applicable withdrawal rate multiplied by $500,000. Subsequent withdrawal amounts based on
prior month’s amount adjusted by the actual monthly change in the Consumer Price Index for that month. This chart is for illustrative
purposes only and is not indicative of any investment. Past performance is no guarantee of future results.

Q
• Will your current plan sustain your cash flow needs throughout
your lifetime?
• What happens if you withdraw too much income too soon?

8 FIDELITY INVESTMENTS
The combined impact of portfolio returns and withdrawals

Withdrawals can have a great impact on your portfolio, especially when you consider the combination
of a market downturn along with the withdrawal. Together, they can have a significant toll on your assets
and limit the potential for future growth. It’s important to have a plan for taking withdrawals.

HYPOTHETICAL EXAMPLE: THE IMPACT OF RETIRING INTO A VOLATILE MARKET

Balance of $100,000 over 25 years, withdrawing $5,000 per year

$750,000

$500,000
$293,658
$262,594 $240,456

$250,000
$39,781
$0

$0
0 5 10 15 20 25
Duration (yrs)
Portfolio A Portfolio B

Sequence of returns risk revolves around the timing or sequence of a series of adverse investment returns. In this example, two port-
folios, A and B, each begin with $100,000. Each aims to withdraw $5,000 per year. Each experiences exactly the same returns over a
25-year period — only in inverse order — or “sequence.” While both portfolios have a 6% compound growth rate over the 25-year period,
Portfolio A has the bad luck of having a sequence of negative returns in its early years and is completely depleted by year 20. Portfolio
B, in stark contrast, scores a few positive returns in its early years and ends up two decades later with more than double the assets with
which it began. For the year-by-year returns and balances for the 25-year period, see page 20.

Q
• What concerns you about withdrawals combined with market declines
in retirement?
• How is investing while taking income different?

INCOME DIVERSIFICATION 9
 Creating a Diversified Income Plan

Transitioning to retirement involves a broad range of considerations and

risks. We can help you build a plan with the right mix of investments to
create cash flow to help make sure you are prepared for retirement.

10 FIDELITY INVESTMENTS
 We believe every investor should have a plan that uses multiple
sources of income to help fund his or her personal version of
retirement. These sources should work together to help provide:

GUARANTEES What guaranteed sources

of income are you expecting
to help your retirement in retirement?
plan succeed.

GUARANTEES

GROWTH FLEXIBILITY
GROWTH
Potential to FLEXIBILITY
meet your to refine your plan
long‑term needs. over time.

How are you investing Why is flexibility

for growth potential? important to you?

INCOME DIVERSIFICATION 11
 Plan Your Lifestyle in Retirement
Understand your expenses

Your strategy for generating income in retirement should begin with an assessment of your desired
lifestyle in retirement. Determining how you will be spending your retirement years, and understanding
how much this will cost, is an important first step.

You should have a realistic estimate of what your expenses will be in retirement. It is helpful to think of
your expenses in two categories:

• Essential: the things you need to live (such as housing, food, health care, utilities, and other
expenses you consider non-negotiable)

• Discretionary: the things you would like to have (such as travel and hobbies)

One effective way to plan is to use reliable or guaranteed sources of income to cover essential
expenses, and to use your investment portfolio to cover discretionary expenses.

GUARANTEED ESSENTIAL
INCOME EXPENSES

INVESTMENT DISCRETIONARY
INCOME EXPENSES

Q
• How much will the lifestyle you envision in retirement cost?
• How much of this is non-negotiable?

12 FIDELITY INVESTMENTS
 GUARANTEES: Reliable Income to
Cover Essential Expenses
Identify your guaranteed income sources

To cover your essential expenses, you should identify your sources of guaranteed4 retirement income,
such as Social Security, a pension, and annuity payments, and evaluate if you have any gaps in
covering your essential, non-negotiable expenses. If there are any gaps, you should consider covering
them with additional sources of guaranteed or reliable income.

When evaluating your sources of reliable income, you should ensure that you make the most of Social
Security. Your Social Security strategy needs to take into consideration your family income, your age,
and life expectancy for you and your spouse. Your estimated life expectancy will be a key factor in
determining which filing date provides you the highest cumulative lifetime income. You should consider
your breakeven age (the time when the total cumulative income from starting income at an older age
becomes more than that at a younger age) in choosing the appropriate time to file for benefits.

HYPOTHETICAL EXAMPLE: SOCIAL SECURITY BREAKEVEN AGE

$1,000,000

$800,000
Social Security
Cumulative Benefit

$600,000 breakeven age

$400,000

$200,000

$0
Age 62 66 70 75 80 85 90 95

Source: ssa.gov.
Based on information input to Social Security Quick Calculator for an individual turning 62 in 2016 with earnings of at least $118,500.
This hypothetical example is for illustrative purposes only. It is not intended to predict or project your Social Security break-
even age.
4
Annuity guarantees are subject to the claims-paying ability of the issuing insurance company.

Q
• What strategy are you currently considering for taking Social Security?
• What are your other existing sources of reliable retirement income?

INCOME DIVERSIFICATION 13
 GROWTH Potential: Build an Investment
Strategy and Remain Disciplined
Build your asset allocation strategy

It’s important to choose a mix of equities, fixed income, and cash that is appropriate as you transition
to retirement. Take into account your time horizon, financial situation, and tolerance for market shifts.
An overly conservative strategy can result in missing out on the long-term potential of stocks, while an
overly aggressive strategy can mean taking on undue risk during volatile markets.

TARGET ASSET MIXES

5% 5%
100% 14% 15% 10% 15%
20% 21% 35% 35% 42% 30%
30% 28% 25%
6%

9%
25%
12% 40% 49%
45% 60% 70%
50% 50% 15% 21%
18%

Short-Term Conservative Moderate Moderate Balanced Growth with Growth Aggressive Most
with Income Income Growth Aggressive

Domestic
Domestic
Domestic
Stocks
Domestic
Stocks
Domestic
Stocks
Domestic
Stocks
Domestic
Stocks
Domestic
Stocks
Foreign
ForeignStocks
Foreign
Stocks Stocks
Domestic
Foreign
Stocks Stocks
Foreign
Stocks
Foreign
Stocks
Foreign
Stocks
Bonds Stocks
Foreign
Bonds Stocks
Bonds Stocks
Foreign
Bonds Stocks
BondsBonds
Short-Term Bonds
Short-Term Bonds
Short-Term Bonds
Short-Term
Short-Term
Short-Term
Short-Term
Short-Term
Short-Term
LOW RISK HIGH RISK

Domestic Stocks Foreign Stocks Bonds Short-Term

The purpose of the target asset mixes is to show how target asset mixes may be created with different risk and return characteristics to
help meet an investor’s goal. You should choose your own investments based on your particular objectives and situation. Remember,
you may change how your account is invested. Be sure to review your decisions periodically to make sure they are still consistent with
your goals. These target asset mixes were developed by Fidelity Investments. Asset allocation does not ensure a profit or guarantee
against a loss.

Q
• How would you describe your current asset allocation strategy?
• How might your asset allocation strategy change as you transition to
needing income?

14 FIDELITY INVESTMENTS
Decide how to manage your investment portfolio

Managing your investments in retirement requires significant time, education, and focus because
there are several investment disciplines to consider. If you are busy and don’t have the time,
expertise, or desire to manage your assets on a full-time basis, you may want to consider having your
money professionally managed. A professional money management team handles the ongoing work
of managing your money and, as appropriate, makes adjustments as your life, your needs, or the
markets change.

1. Do your research
Filter through thousands
of investments.
5. Manage for taxes
Use all the strategies
appropriate for you.

2. Choose investments
Know what to buy, and when
4. Rebalance to buy it.
Make sure your
investment mix stays
aligned with
your goals.
3. Monitor your portfolio
Keep an eye on your
investments as markets
change.
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Past performance is no guarantee of future results.

Q
• How many of these are you comfortable managing on your own?
• Why is it so important to get these right?

INCOME DIVERSIFICATION 15
 FLEXIBILITY: Create Your Diversified
Income Plan
Align income sources with your objectives

We believe it is important to combine income from multiple sources to create a diversified income
stream in retirement. This is because complementary income sources work together to help reduce
the effects of some important key risks, such as inflation, longevity, and market volatility. For example,
taking withdrawals from your investment portfolio doesn’t guarantee income for life, but gives you
the flexibility to change the amount you withdraw each month. On the other hand, income annuities
provide guaranteed income for life, but may not offer as much flexibility or income growth potential.

LIFETIME INCOME INVESTMENT INCOME COMBINED INCOME

Annuities with
Social Security, guaranteed Principal,
pensions lifetime income interest, dividends

Market
Volatility

Longevity

Inflation

Flexibility

Strong Alignment Moderate Alignment

Note: The check marks above are intended to represent which product categories generally align with
a desired objective. The check marks do not, however, precisely represent the features and benefits of
specific products. Certain features and benefits are subject to product terms, exclusions, and limitations.

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

16 FIDELITY INVESTMENTS
Your diversified income plan

After taking into account your investing priorities and overall financial situation, the combination of
income sources you choose becomes your diversified income plan. Each component of your plan
serves a purpose. Together, they can help provide income for life, some protection from inflation and
market volatility, and potential for growth. Also, as part of your overall financial plan, you may want to
preserve some principal for use in an emergency or create a reserve to leave a legacy for heirs. You
can accomplish this separately from, or in conjunction with, a diversified income plan.

HYPOTHETICAL INVESTMENT PORTFOLIO

Emergency Fund Reserves

For Retirement Income
(3–6 months of living expenses) (assets not required for income)

Diversified Income Plan: Seeks to cover essential

expenses with guaranteed income sources, and
use withdrawals from an investment portfolio to
help cover discretionary expenses.

Social Security
and Pensions

Investment Portfolio
(Professionally Managed, Fixed
Individually Managed, or Annuities
a Combination)
• Immediate Income
• Deferred Income
•  ixed Deferred with
F
Guaranteed Lifetime
Withdrawal Benefit

This is a sample hypothetical diversified income plan. The products and allocations appropriate for any given individual
will vary.

INCOME DIVERSIFICATION 17
 Create Your Plan —
Your Next Steps
Working together with you, we will help you take the following steps to create
a plan to support your lifestyle in retirement:

Completed

1 Identify your personal and financial goals.

2 Complete a retirement income plan to determine the

probability that you will have enough money to last
throughout retirement.

3 Determine:
• How much of your investment portfolio you want to allocate
to an emergency fund, protection, and growth potential

• When to take Social Security

• Who will manage your investment portfolio

4 Implement your plan with the right mix of income-

producing investments to balance your financial needs
and investment priorities in retirement.

5 Set up regular reviews with your Fidelity investment

professional to refine your portfolio to help meet your
lifestyle and income needs.

6 Enjoy your retirement!

18 FIDELITY INVESTMENTS
INCOME DIVERSIFICATION 19
 Additional disclosure for page 3: Estimates are calculated for “average” retirees but may be more or less depending
on actual health status, area of residence, and longevity. Estimate is net of taxes. The Fidelity Retiree Health Care Costs
Estimate assumes individuals do not have employer-provided retiree health care coverage, but do qualify for the federal
government’s insurance program, Original Medicare. The calculation takes into account cost-sharing provisions (such as
deductibles and coinsurance) associated with Medicare Part A and Part B (inpatient and outpatient medical insurance). It
also considers Medicare Part D (prescription drug coverage) premiums and out-of-pocket costs, as well as certain services
excluded by Original Medicare. The estimate does not include other health-related expenses, such as over-the-counter
medications, most dental services, and long-term care. Life expectancies based on research and analysis by Fidelity
Investments Benefits Consulting group and data from the Society of Actuaries, 2014.
Additional information for page 9: Hypothetical Example: The Impact of Retiring into a Volatile Market
PORTFOLIO A PORTFOLIO B
Year Return Balance Return Balance

0 $100,000 $100,000
1 –15% $80,750 22% $115,900
2 –4% $72,720 8% $119,772
3 –10% $60,948 30% $149,204
4 8% $60,424 7% $154,298
5 12% $62,075 18% $176,171
6 10% $62,782 9% $186,577
7 –7% $53,737 28% $232,418
8 4% $50,687 14% $259,257
9 –12% $40,204 –9% $231,374
10 13% $39,781 16% $262,594
11 7% $37,216 –6% $242,138
12 –10% $28,994 17% $277,452
13 19% $28,553 19% $324,217
14 17% $27,557 –10% $287,296
15 –6% $21,204 7% $302,056
16 16% $18,796 13% $335,674
17 –9% $12,555 –12% $290,993
18 14% $8,612 4% $297,433
19 28% $4,624 –7% $271,962
20 9% $0 10% $293,658
21 18% $0 12% $323,297
22 7% $0 8% $343,761
23 30% $0 –10% $304,885
24 8% $0 –4% $287,890
25 22% $0 –15% $240,456
Arithmetic Mean 6.8% 6.8%
Standard Deviation 12.8% 12.8%
Compound Growth Rate 6% 6%

20 FIDELITY INVESTMENTS
90 0 SALEM STREET S M I T H FI E L D, R H O D E I S L A N D 0 2 917

This information is intended to be educational and is not tailored to the investment needs of any specific investor.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain
or lose money.
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice.
Consult an attorney or tax professional regarding your specific situation.
Fixed annuities available at Fidelity are issued by third-party insurance companies, which are not affiliated with
any Fidelity Investments company. These products are distributed by Fidelity Insurance Agency, Inc., and, for
certain products, by Fidelity Brokerage Services, Member NYSE, SIPC. A contract’s financial guarantees are
solely the responsibility of and are subject to the claims-paying ability of the issuing insurance company.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
© 2017 FMR LLC. All rights reserved.
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