Fidelity Freedom Lifetime Income
®Annuity
SECURE A STREAM OF INCOME THAT IS
GUARANTEED FOR LIFE.
Not Part of the Prospectus
Fidelity insurance products are issued by Fidelity Investments Life Insurance Company (FILI), 100 Salem Street,
Smithfield, RI 02917, and, in New York, by Empire Fidelity Investments Life Insurance Company
®, New York,
N.Y. FILI is licensed in all states except New York. A contract’s financial guarantees are subject to the
claims-paying ability of the issuing insurance company.
Fidelity Freedom Lifetime Income Annuity*
Fidelity Freedom Lifetime Income Annuity (FFLI) is an immediate variable income annuity that
delivers lifetime income
1to help you reduce the risk of outliving your retirement savings. Within
FFLI, you can choose from eight diversified portfolios
2that have the potential to grow your income
stream over time.
Ideally used in combination with a fixed income annuity and systematic withdrawals from an
investment portfolio, FFLI can be part of a diversified income plan.
1 Guarantees are subject to the claims-paying ability of the issuing insurance company.
2 Diversification does not ensure a profit or protect against a loss in a declining market.
3 Restrictions apply; refer to the prospectus. You may choose to have either a withdrawal period or a guarantee period, but not both. The withdrawal
option is not available in all states and is not applicable for nonqualified funds. Withdrawals of taxable amounts and taxable income received from an annuity are subject to ordinary income tax. Withdrawals of taxable amounts taken before age 59½ may be subject to a 10% IRS penalty.
4 The performance of the Fidelity VIP Freedom Lifetime Income and Fidelity VIP FundsManager portfolios depends on that of their underlying
Fidelity VIP funds. These portfolios are subject to the volatility of the financial markets in the U.S. and abroad, and may be subject to the additional risks associated with investing in high-yield, commodity-linked, small-cap, and foreign securities.
*
Fidelity insurance products are issued by Fidelity Investments Life Insurance Company (FILI), 100 Salem Street,
Smithfield, RI 02917, and, in New York, by Empire Fidelity Investments Life Insurance Company
®, New York,
N.Y. FILI is licensed in all states except New York. A contract’s financial guarantees are subject to the
claims-paying ability of the issuing insurance company.
Diversified Income Plan
Investment Portfolio
Growth Potential
Fixed Income Annuities
Guaranteed Fixed
Income
Immediate Variable
Income Annuities
Lifetime Income and
Growth Potential
FFLI can help provide:
Lifetime income
Variable income payments that last a lifetime,
in return for a lump sum payment. To receive
lifetime income, you will have limited or no
access to your assets.
The potential for income growth
Payment amounts are based on the
performance of one of eight diversified
portfolios within FFLI and will fluctuate —
increasing or decreasing over time. Although
payment amounts are not guaranteed, the
potential for payments to grow can help keep
pace with rising costs and inflation.
Professional money management
Lifetime income is generated from
Fidelity-managed diversified portfolios. Choose from
two types — based on your risk tolerance or
your age.
Asset protection and flexibility
Protection for your heirs to ensure that
beneficiaries will receive any remaining
income payments for a specific period of
time — typically from five to 45 years or, if
eligible, a withdrawal period
3that offers
flexible access to annuity funds
4— is available
for purchase. Keep in mind that taking a
withdrawal will reduce the amount of future
annuity income payments.
This is a sample, hypothetical diversified income plan. The products and allocations appropriate for any given individual will vary.
How it works
How are my lifetime income payments from FFLI calculated?
Your income amount is established by factors including, but not limited to:
•
Your age
•
Your gender*
•
How often you elect to receive payments (monthly, quarterly, semiannually, or annually)
•
An assumed annual rate of return of 3.5% (benchmark
5rate of return)
Your first and subsequent payments are calculated based on the net performance of the investment
portfolio you have selected
†compared with the annualized 3.5% benchmark. For monthly frequency,
the 3.5% benchmark is approximately 0.29%.
Each period, your payment
§will:
•
Increase if your investment portfolio’s net performance exceeds the benchmark
•
Decrease if your investment portfolio’s net performance falls short of the benchmark
* There are a limited number of states that do not allow gender to be used as a consideration for determining income payments.
5 The benchmark rate of return is one factor used to determine your initial and subsequent payments. Assuming you do not make any withdrawals
from the contract date to the first annuity income date, and from one annuity income date to the next, then annuity income will (a) increase, if the annualized investment return for your contract is greater than the benchmark rate of return, or (b) decrease, if the annualized investment return for your contract is less than the benchmark rate of return. The annualized investment return includes your contract’s fund performance minus the annuity and fund fees.
† Depending on your state of residence and type of contract, your purchase payment may initially be invested for a short period of time in the money
market investment portfolio. In such cases, your first income payment will be based in part or entirely on the net performance of the money market investment portfolio.
§Payment amount is not guaranteed and will fluctuate.
Investing in a variable income annuity involves risk of loss — the amount of each payment is not guaranteed
and will fluctuate.
Relationship of Performance and Benchmark
to Income Payment
If the Funds’ Performance
(after expenses)
Then the Annuity
Income Payment
Exceeds the Benchmark
Increases
Equals the Benchmark
Stays Level
This hypothetical example assumes a $125,000 investment by a 65-year-old male in an investment portfolio utilizing a systematic withdrawal program (SWP) and a $125,000 investment in a single life variable income annuity with a 10-year guarantee period (FFLI) under two market scenarios: one in which the rate of return varies each year (8%, 10%, 8%, –3%, 12%, 20%, 4%, 16%, –5%, 2%, –1%, 9%, 15%, 18%, 3%, 9%, –2%, 10%, 7%, 13%, 12%, 11%, 5%, –6%, 19%, 12%, 10%, 0%, 13%, 0%,10%, 10%, 8%, –2%, and 12%) and one in which the rate of return is 0% for all years. For the investment portfolio, we assume withdrawals equal to the FFLI payment are taken at the beginning of each year and an annual underlying fund fee of 0.72%. The FFLI payments reflect an annual annuity charge of 0.60% and an annual underlying fund fee of 0.72%, and are assumed to be made annually at the beginning of each year. For both the investment portfolio and FFLI, the $125,000 initial investment is assumed to be returned over 24 years (or age 89). Taxes were not taken into account for either example; if they were included, the results would be different. The average of the variable annual returns is 7.41% gross, and 6.00% net of all FFLI fees. See “Diversified Income Plan — Hypothetical Results” for the net rates of return reflecting the fees as well as additional information.
This hypothetical example is for illustrative purposes only. It is not intended to predict or project investment results of Fidelity Freedom Lifetime Income and the systematic withdrawal program. Your rate of return may be higher or lower than in the hypothetical illustration shown above.
How is FFLI different from a withdrawal plan?
A variable income annuity, such as FFLI, is often able to provide higher income payments than other
products because of the “longevity bonus” (or mortality credits) it provides. This longevity bonus is made
possible through the pooling of contract owners’ assets. Effectively, the assets from annuitants with shorter
life spans remain in “the pool” to support the payouts collected by annuitants with longer life spans. Put
simply, the longer you live, the more money you will receive over time. While an annual annuity charge will
apply (0.60% for FFLI), a variable income annuity provides lifetime income where other investment options
that generate income based only on return of principal and interest (or investment growth) can run out
of money.
No-Growth Environment
(0% Rate of Return)
65 $0 $5,000 $10,000 $15,000
70 75 80 85 90 95 100 65
$0 $5,000 $10,000 $15,000
70 75 80 85 90 95 100 $0 65 $5,000 $10,000 $15,000
70 75 80 85 90 95 100 65
$0 $5,000 $10,000 $15,000
70 75 80 85 90 95 100 In this example, you run out of money by age 89.
Return of Principal Investment Growth Longevity Bonus (Mortality Credits)
Your longevity bonus means you will continue to receive payments — for life.
Investment Portfolio
Initial Investment: $125,000
FFLI
Initial Investment: $125,000
Variable Returns
65 $0 $5,000 $10,000 $15,000 $20,00070 75 80 85 90 95 100 $0 65 $5,000 $10,000 $15,000 $20,000
70 75 80 85 90 95 100 65 $0 $5,000 $10,000 $15,000 $20,000
70 75 80 85 90 95 100 $0 65 $5,000 $10,000 $15,000 $20,000
70 75 80 85 90 95 100
Return of Principal Investment Growth Longevity Bonus (Mortality Credits)
Your longevity bonus adds additional income — for life. Your income is limited to principal
+ investment growth and, in this example, you would run out of
money at age 89.
Investment Portfolio
Initial Investment: $125,000
FFLI
Initial Investment: $125,000
Hypothetical Examples
For the investment portfolio, we assume that withdrawals equal to the FFLI payment are taken at the beginning of each year.
These hypothetical examples assume a $500,000 investment by a 65-year-old male in each of the following two scenarios: Scenario 1 — a $375,000 investment in an investment portfolio utilizing a systematic withdrawal program (SWP) and a $125,000 investment in a single life fixed income annuity with a 10-year guarantee period and 2% cost-of-living adjustment (COLA). Scenario 2 — a $250,000 investment in an investment portfolio utilizing a SWP, a $125,000 investment in a single life fixed income annuity with a 10-year guarantee period and 2% COLA, and $125,000 in a single life variable income annuity with a 10-year guarantee period (FFLI). The two scenarios illustrate two market conditions: one in which the rate of return varies each year (8%, 10%, 8%, –3%, 12%, 20%, 4%, 16%, –5%, 2%, –1%, 9%, 15%, 18%, 3%, 9%, –2%, 10%, 7%, 13%, 12%, 11%, 5%, –6%, 19%, 12%, 10%, 0%, 13%, 0%,10%, 10%, 8%, –2%, and 12%) and one in which the rate of return is 0% for all years. For the investment portfolio, we assume a 4% sustainable withdrawal percentage and annual underlying fund fee of 0.72%. The year-one payment amount is equal to 4% of the SWP investment. Payout amounts for subsequent years equal the prior year amount increased by a 2.5% inflation adjustment. The FFLI payments reflect an annual annuity charge of 0.60% and an annual underlying fund fee of 0.72%, and are assumed to be made annually at the beginning of each year. See “Diversified Income Plan — Hypothetical Results” for the net rates of return reflecting the fees as well as additional information.
This hypothetical example is for illustrative purposes only. It is not intended to predict or project investment results of FFLI and the SWP. Your rate of return may be higher or lower than in the hypothetical illustration shown above. The amount of each payment is not guaranteed and will fluctuate.
Fixed income annuity payments quoted are based on rates as of 9/26/14. Rates are subject to change.
How does FFLI fit into a diversified income plan?
Because of the variable nature of the income payments, FFLI is ideally used in combination with a fixed income
annuity that provides steady, predictable payments, and systematic withdrawals from an investment portfolio.
And because an allocation to FFLI provides access to the longevity bonus pool, it can provide additional income
in both variable and 0% growth market environments.
Variable Returns
65 $0 $25,000 $50,000 $75,00070 75 80 85 90 95 100 $0 65 $25,000 $50,000 $75,000
70 75 80 85 90 95 100 Cumulative Income
Payments: $1,192,725
Cumulative Income Payments: $1,356,163
Annual income at age 65:
$21,408
Annual income at age 100:
$48,414
Annual income at age 65:
$24,291
Annual income at age 100:
$54,746
Hypothetical Examples 65 $0 $25,000 $50,000 $75,00070 75 80 85 90 95 100 $0 65 $25,000 $50,000 $75,000
70 75 80 85 90 95 100 Income from
investment portfolio depleted by age 83
Income from FFLI continues for life
Cumulative Income Payments: $705,534 Cumulative Income
Payments: $683,022
Annual income at age 65:
$21,408
Annual income at age 100:
$12,816
Annual income at age 65:
$24,291
Annual income at age 100:
$14,306
No-Growth Environment
(0% Rate of Return)
For the investment portfolio, we assume a 4% sustainable withdrawal percentage.
Investment Portfolio
Fixed Income Annuity Initial Investments: $375,000 Investment Portfolio and $125,000 Fixed Income Annuity
Fixed Income Annuity FFLI Investment
Portfolio
Initial Investments: $250,000 Investment Portfolio, $125,000 Fixed Income Annuity, and $125,000 FFLI
Investment Portfolio
Fixed Income Annuity Initial Investments: $375,000 Investment Portfolio and $125,000 Fixed Income Annuity
Fixed Income Annuity FFLI Investment
Portfolio
Initial Investments: $250,000 Investment Portfolio, $125,000 Fixed Income Annuity, and $125,000 FFLI
Diversified Income Plan — Hypothetical Results
Example assumes payments take place annually at the beginning of each year and are based on the prior year’s
investment performance.
Age Gross ReturnsVariable
Variable Net Returns —
FFLI
Variable Net Returns— Investment
Portfolio
FFLI (Initial Investment:
$125K)
Investment Portfolio
(Initial Investment:
$250K)
Fixed Income Annuity (2% COLA) (Initial Investment:
$125K) Total Annual Payments
FFLI Avg Annual (7.41% Gross, 6.00% Net) Returns:
Annual Payments
FFLI No Growth (0% Gross, –1.32%
Net) Return: Annual Payments
65 8.0% 6.58% 7.22% $7,883 $10,000 $6,408 $24,291 $7,883 $7,883
66 10.0% 8.55% 9.21% $8,128 $10,250 $6,537 $24,915 $8,084 $7,526
67 8.0% 6.58% 7.22% $8,525 $10,506 $6,667 $25,699 $8,279 $7,176
68 –3.0% –4.28% –3.70% $8,779 $10,769 $6,801 $26,349 $8,479 $6,842 69 12.0% 10.53% 11.19% $8,119 $11,038 $6,937 $26,094 $8,683 $6,524 70 20.0% 18.42% 19.14% $8,671 $11,314 $7,075 $27,060 $8,893 $6,220
71 4.0% 2.63% 3.25% $9,921 $11,597 $7,217 $28,734 $9,107 $5,931
72 16.0% 14.47% 15.16% $9,837 $11,887 $7,361 $29,086 $9,327 $5,655 73 –5.0% –6.25% –5.68% $10,880 $12,184 $7,509 $30,573 $9,552 $5,392
74 2.0% 0.66% 1.27% $9,855 $12,489 $7,659 $30,003 $9,783 $5,141
75 –1.0% –2.30% –1.71% $9,585 $12,801 $7,812 $30,198 $10,019 $4,902
76 9.0% 7.57% 8.22% $9,047 $13,121 $7,968 $30,136 $10,260 $4,674
77 15.0% 13.49% 14.17% $9,403 $13,449 $8,127 $30,979 $10,508 $4,456 78 18.0% 16.45% 17.15% $10,310 $13,785 $8,290 $32,385 $10,761 $4,249
79 3.0% 1.64% 2.26% $11,600 $14,130 $8,456 $34,186 $11,021 $4,051
80 9.0% 7.57% 8.22% $11,392 $14,483 $8,625 $34,500 $11,287 $3,863
81 –2.0% –3.29% –2.71% $11,840 $14,845 $8,797 $35,482 $11,559 $3,683 82 10.0% 8.55% 9.21% $11,063 $15,216 $8,973 $35,252 $11,838 $3,512
83 7.0% 5.59% 6.23% $11,603 $15,597 $9,153 $36,352 $12,123 $3,348
84 13.0% 11.51% 12.19% $11,838 $15,987 $9,336 $37,160 $12,416 $3,192 85 12.0% 10.53% 11.19% $12,754 $16,386 $9,523 $38,663 $12,715 $3,044 86 11.0% 9.54% 10.20% $13,620 $16,796 $9,713 $40,129 $13,022 $2,902
87 5.0% 3.62% 4.24% $14,415 $17,216 $9,907 $41,538 $13,336 $2,767
88 –6.0% –7.24% –6.68% $14,431 $17,646 $10,105 $42,183 $13,658 $2,639 89 19.0% 17.43% 18.14% $12,934 $18,087 $10,308 $41,329 $13,987 $2,516 90 12.0% 10.53% 11.19% $14,675 $18,539 $10,514 $43,729 $14,325 $2,399 91 10.0% 8.55% 9.21% $15,672 $19,003 $10,724 $45,399 $14,670 $2,287 92 0.0% –1.32% –0.72% $16,437 $19,478 $10,939 $46,853 $15,024 $2,181 93 13.0% 11.51% 12.19% $15,672 $19,965 $11,157 $46,794 $15,387 $2,079 94 0.0% –1.32% –0.72% $16,885 $20,464 $11,380 $48,730 $15,758 $1,982 95 10.0% 8.55% 9.21% $16,100 $20,976 $11,608 $48,683 $16,138 $1,890 96 10.0% 8.55% 9.21% $16,886 $21,500 $11,840 $50,226 $16,527 $1,802 97 8.0% 6.58% 7.22% $17,710 $22,038 $12,077 $51,825 $16,926 $1,718 98 –2.0% –3.29% –2.71% $18,237 $22,589 $12,319 $53,144 $17,335 $1,638 99 12.0% 10.53% 11.19% $17,041 $23,153 $12,565 $52,759 $17,753 $1,562
100 $18,198 $23,732 $12,816 $54,746 $18,181 $1,490
Cumulative Payments: $449,945 $573,014 $333,204 $1,356,163
6 According to 12/31/13 data on immediate variable annuities from Morningstar, Inc., at 0.60%, Fidelity Freedom Lifetime Income’s annual annuity
charge is significantly lower than the national industry average 1.08% annual annuity charge. Underlying fund fees also apply.
7 Payment amount is not guaranteed and will fluctuate.
8
Guarantees are subject to the claims-paying ability of the issuing insurance company.
9 Restrictions may apply; refer to prospectus. The withdrawal option is not available in all states and is not applicable for nonqualified funds.
Withdrawals of taxable amounts and taxable income received from an annuity are subject to ordinary income tax. Withdrawals of taxable amounts taken before age 59½ may be subject to a 10% IRS penalty.
10 Fidelity VIP Funds Manager Portfolios are named according to the equity fund allocations in each. The fund you choose will depend on your
tolerance for risk and your ability to adjust to fluctuation in value.
11 This is only a guide. Customers should evaluate their own circumstances before selecting a fund. The allocation of each portfolio — which
invests in a combination of underlying Fidelity VIP equity, fixed-income, and short-term funds — is adjusted over time, gradually becoming more conservative. This process is known as the “roll down.” The Fidelity VIP Freedom Lifetime Income portfolios are managed to gradually become more conservative over time as they approach their ultimate target asset allocation. Fidelity VIP Freedom Lifetime Income II and III are expected to ultimately merge with Fidelity VIP Freedom Lifetime Income I. As with all Fidelity Freedom Lifetime Income portfolios, principal invested is not guaranteed at any time, including when or after the funds reach their ultimate target asset allocation.
12 Before exchanging, check with your current provider to see if it will assess a surrender charge. Consider the existing benefits and features you may lose in an exchange, which may be of particular importance in poor market conditions.
Quick facts and features
A low-cost immediatevariable annuity that delivers lifetime income
• Because our low annual annuity charge of 0.60%6 is significantly lower than the national industry average of 1.08%, more of your money will go to generating income and less to paying fees.
• No initial sales charges or annual maintenance fees. Lifetime income
options
• You (or you and your spouse) will receive income payments7 guaranteed8 to last a lifetime in return for a lump sum investment. To receive these lifetime income payments, however, you will have limited or no access to your assets.
Features to help address your unique retirement needs
With FFLI, you have the ability to select and pay for only the features you need. • The optional guarantee period helps ensure that your beneficiaries will continue to
receive income payments from the annuity for a certain length of time — typically from five to 45 years.
• If you are eligible, the optional withdrawal feature9 allows up to two partial withdrawals per year if you purchase your annuity with pretax assets. Taking a withdrawal will affect the amount of future payments that you will receive.
Professional money management and investment options
Your lifetime income and potential income growth is generated from a Fidelity-managed diversified portfolio. You can choose from two types* — based on your risk tolerance or your age. With these portfolios, fund managers make the investing choices, monitor the results, and maintain each portfolio’s target asset mix. Fidelity takes the guesswork out of making investment decisions so you don’t have to do it alone.
Based on your risk tolerance:10
• Fidelity® VIP FundsManager® 20% Portfolio • Fidelity® VIP FundsManager® 50% Portfolio • Fidelity® VIP FundsManager® 60% Portfolio • Fidelity® VIP FundsManager® 70% Portfolio • Fidelity® VIP FundsManager® 85% Portfolio Based on the year you were born:11
• Fidelity® VIP Freedom Lifetime Income® I Portfolio — if you were born in 1939 or earlier
• Fidelity® VIP Freedom Lifetime Income® II Portfolio — if you were born in the 1940s • Fidelity® VIP Freedom Lifetime Income® III Portfolio — if you were born in the 1950s
or later
*Can be invested in only one portfolio at any time. How to fund your
annuity
• Tax-free transfer from a qualified 401(k) plan, IRA, or other employer-sponsored plan. • Use money from your current savings, bonus, or inheritance.
• Exchange an existing annuity to Fidelity tax free with a 1035 exchange.12 • $25,000 minimum purchase amount.
Payment options
• Receive your income payment by check or have it directly deposited.
• Choose to receive income payments monthly, quarterly, semiannually, or annually. • Select either the 1st or the 15th of the month for the payment calculation date.
Before investing, consider the investment objectives, risks, charges, and expenses of the annuity
and its investment options. Call or write to Fidelity or visit Fidelity.com for a free prospectus or, if
available, a summary prospectus containing this information. Read it carefully.
Investing in a variable income annuity involves risk of loss — the amount of each payment is not
guaranteed and will fluctuate.
Fidelity insurance products are issued by Fidelity Investments Life Insurance Company (FILI), 100 Salem Street,
Smithfield, RI 02917, and, in New York, by Empire Fidelity Investments Life Insurance Company
®, New York,
N.Y. FILI is licensed in all states except New York. A contract’s financial guarantees are subject to the
claims-paying ability of the issuing insurance company.
Fidelity Freedom Lifetime Income® (Policy Form Nos. FFLI-Q-2005 et al. and FFLI-NQ-2005 et al.) is issued by Fidelity Investments Life Insurance
Company. Freedom Lifetime Income (Policy Form Nos. EFLI-Q-2005 et al. and EFLI-NQ-2005 et al.) is issued by Empire Fidelity Investments Life Insurance Company®. Fidelity Brokerage Services, Member NYSE, SIPC, and Fidelity Insurance Agency, Inc., are the distributors.
Not Part of the Prospectus
© 2014 FMR LLC. All rights reserved.
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FFLI-BRO-1014 655669.3.0 Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917 1.964437.102
