Managed Retirement Funds - Fidelity (2024)

FAQs

Is Fidelity professionally managed account worth it? ›

Fidelity distinguishes itself with professional-grade research, screening and trading tools. With zero commissions being the norm, its lack of account management fees nudges the platform ahead. This is an exceptional platform for investors who ascribe to fundamental investment research.

Fidelity's 45% rule states that you should plan to save and invest enough to replace at least 45% of your preretirement income. This rule assumes that you retire at age 67 and have no pension income, other than Social Security.

We did the math—looking at history and simulating many potential outcomes—and landed on this: For a high degree of confidence that you can cover a consistent amount of expenses in retirement (i.e., it should work 90% of the time), aim to withdraw no more than 4% to 5% of your savings in the first year of retirement, ...

Based on those assumptions, we estimate that saving 10x (times) your preretirement income by age 67, together with other steps, should help ensure that you have enough income to maintain your current lifestyle in retirement. That 10x goal may seem ambitious. But you have many years to get there.

Disadvantages. There are fees involved when investing in a managed fund, as you are hiring the service of the fund manager to produce returns on your investment. The amount of fees can vary greatly and can have a significant impact on your overall returns.

Gross advisory fee applicable to accounts managed through Fidelity^® Strategic Disciplines ranges from 0.20% to 0.49% and gross advisory fee applicable to accounts managed through Fidelity^® Wealth Services ranges from 0.50%–1.04%, in each case based on a minimum investment of $2 million.

The short answer is yes, $500,000 is enough for many retirees. The question is how that will work out for you. With an income source like Social Security, modes spending, and a bit of good luck, this is feasible. And when two people in your household get Social Security or pension income, it's even easier.

So, if you're aiming for $100,000 a year in retirement and also receiving Social Security checks, you'd need to have this amount in your portfolio: age 62: $2.1 million. age 67: $1.9 million. age 70: $1.8 million.

When you invest through a distributor like Fidelity, any cash held on your behalf is placed with a range of different banks in designated client bank accounts. As the cash is kept completely separate from Fidelity's own money, if we became insolvent it would be returned to you in an orderly manner.

Protecting your assets

With our Customer Protection Guarantee, we reimburse you for losses from unauthorized activity in your accounts. We also participate in asset protection programs such as FDIC and SIPC to help provide the best service possible.

What is Fidelity 5 year rule? ›

Key takeaways

Contributions can always be taken tax- and penalty-free. But Roth IRAs must meet the 5-year aging rule before withdrawals from earnings can be taken tax- and penalty-free. Failing to meet the 5-year rule can result in taxes and penalties.

But most people are far from reaching that objective, with the study finding that the average amount held in a retirement account today is just $88,400. That means that the typical worker has a $1.37 million gap between their actual savings and their retirement aspirations.

Average Monthly Retirement Income

According to data from the BLS, average 2022 incomes after taxes were as follows for older households: 65-74 years: $63,187 per year or $5,266 per month. 75 and older: $47,928 per year or $3,994 per month.

The final multiple — 10 to 12 times your annual income at retirement age. If you plan to retire at 67, for instance, and your income is $150,000 per year, then you should have between $1.5 and $1.8 million set aside for retirement.

Fidelity remains our top overall choice for best online broker as well as our choice as the best broker for low costs and for ETFs this year. In addition, Fidelity earned top ranks as the best broker for cash management, which are new additions to our best online broker and trading platforms awards this year.

Managed money offers a degree of tax efficiency, flexibility, convenience and peace of mind that few other investment options can provide. These features have made fee-based investing and managed-money investment vehicles quite popular among affluent, tax-sensitive investors.

Managed account trades can be timed to minimize tax liability; mutual fund investors have no control when a fund realizes taxable capital gains. Managed account-holders have maximum transparency and control over assets; mutual fund-holders don't own the fund's assets, only a share of the fund's asset value.

Access to a broad range of investments you otherwise may not have access to. By pooling your money with other investors, you also gain access to a variety of investments that you may have not been able to invest in as an individual. You can gain access to markets and strategies that rely on larger scale buying power.