Make Your Money Last as Long as You Do

Upward adjustments stop at age 85, but monthly checks will continue for the rest of your life once you start the withdrawal program. (By age 95, you must annuitize or surrender if you haven't started a withdrawal program.) When the owner dies, any remaining balance goes to the named beneficiary.

The Fidelity annuity does lack some significant provisions and choices of other similar annuities, according to independent annuity expert Jeffrey Oster of Raymond James. He notes that similar annuities offered by Prudential and John Hancock provide more varied investment choices. They also guarantee at least a 5% increase on the initial investment base annually, even if the value of the investment portfolio declines -- a guarantee Fidelity does not provide.

And these other companies provide a death benefit that guarantees at least a return of the original principal investment, less withdrawals, while the Fidelity contract returns only the remaining market value when the owner dies.

These differences may help explain why Fidelity can brag about its lower-than-average expenses of 110 basis points per year for a single life and 125 basis points annually for a joint account -- a figure about 40% below the industry average. Fidelity's annuity also has surrender charges of 2% on withdrawals made during the first five years that exceed the guaranteed monthly benefit amount, or required minimum distribution if the annuity is held in a retirement account. There are no surrender charges if the owner dies.

These are the first of many new products on the drawing board of financial services companies hoping to cash in on boomer retirement assets -- even as they help boomers cash in as well! And that's The Savage Truth.

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