-
Hypothetical withdrawal of assets held in an untaxed account invested in portfolios with asset mixes as indicated. Several hundred financial market return scenarios were run to determine how the asset mixes may have performed. The results for the Extended Down Market highlight the minimum number of years the portfolios would have lasted in 90% of the scenarios. These charts are for illustrative purposes only and are not indicative of any investment. These exhibits are not intended to project or predict the present or future value of the actual holdings in a participant's portfolio or of the performance of a given model portfolio of securities. Past performance is no guarantee of future results.
The estimated returns for the stock and bond asset classes are based on a "risk premium" approach. The risk premium for these asset classes is defined as their historical returns relative to a 10-year Treasury bond. Risk premium estimates for stocks and bonds are added to the 10-year Treasury yield. Short-term investment asset class returns are based on a historical risk premium added to an inflation rate, which is calculated by subtracting the TIPS (Treasury Inflation Protected Securities) yield from the 10-year Treasury yield. This method results in what we believe to be an appropriate estimate of the market inflation rate for the next 10 years. Each year (or as necessary), these assumptions are updated to reflect any movement in the actual inflation rate. Risk premium estimates and volatility of stocks, bonds, and short-term asset classes are based on the historical annual data from 1926 through the most recent year-end data available from Ibbotson Associates, Inc. Stocks, bonds, and short-term asset classes are represented by the S&P 500®, U.S. Intermediate Term Government Bonds, and 30-day U.S. Treasury bill, respectively. Annual returns assume the reinvestment of interest income and dividends, no transaction costs, no management or servicing fees, and the rebalancing of the portfolio every year.
Investors may be charged fees when investing in an actual portfolio of securities, which are not reflected in illustrations utilizing market index returns. You should choose your own investments based on your particular objectives and situation. Remember, you may change how your account is invested. Note that changes may result in gains or losses. Be sure to review your decisions periodically to make sure they are still consistent with your goals. You should also consider all of your investments when making your investment choices.
The S&P 500® Index is a registered trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Fidelity Distributors Corporation and its affiliates. It is an unmanaged index of the common stocks of 500 widely held U.S. stocks that includes the reinvestment of dividends. It is not possible to invest directly in the index. The Consumer Price Index is a widely recognized measure of inflation calculated by the U.S. government that tracks changes in the prices paid by consumers for finished goods and services. Information provided is general and educational in nature. It is not intended to be, and should not be construed as, legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Consult an attorney or tax advisor regarding a specific legal or tax situation. U.S. stock prices are more volatile than those of other securities. Government bonds and corporate bonds have more moderate short-term price fluctuations than stocks but provide lower potential long-term returns. U.S. Treasury bills maintain a stable value (if held to maturity), but returns are only slightly above the inflation rate.
Asset allocation does not ensure a profit or protect against loss.
-
The tool's illustrations result from running a minimum of 250 hypothetical market simulations. The market return data used to generate the illustration is intended to provide you with a general idea of how asset mixes have performed historically. Our analysis assumes a level of diversity within each asset class consistent with a market index benchmark that may differ from the diversity of your own portfolio. Please note that the projections do not reflect the impact of any transaction cost or management and servicing fees (except variable annuities); if these had been included, the project account balances would have been lower.
IMPORTANT: The projections or other information generated by Fidelity Retirement Income Planner regarding the liklihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time.
This chart is not intended to project or predict the present or future value of the actual holdings in a participant's portfolio or of the performance of a given model portfolio of securities.
Several hundred financial market return scenarios were run to determine how the asset mixes may have performed. The Average Market and Extended Down Market results are based on 50% and 90% confidence levels, respectively. The results for the Average Market highlight the number of years the hypothetical portfolio would have lasted in 50% of the scenarios. The results for the Extended Down Market are based on a 90% confidence level highlighting the minimum number of years the portfolios would have lasted in 9 out of 10 of the scenarios generated. The estimated returns for the stock and bond asset classes are based on a "risk premium" approach. The risk premium for these asset classes is defined as their historical returns relative to a 10-year Treasury bond. Risk premium estimates for stocks and bonds are added to the 10-year Treasury yield. Short-term investment asset class returns are based on a historical risk premium added to an inflation rate, which is calculated by subtracting the TIPS (Treasury Inflation Protected Securities) yield from the 10-year Treasury yield. This method results in what we believe to be an appropriate estimate of the market inflation rate for the next 10 years. Each year (or as necessary), these assumptions are updated to reflect any movement in the actual inflation rate. Risk premium estimates and volatility of stocks, bonds, and short-term asset classes are based on the historical annual data from 1926 through the most recent year-end data available from Ibbotson Associates, Inc. Stocks, bonds, and short-term asset classes are represented by the S&P 500®, U.S. Intermediate Term Government Bonds, and 30-day U.S. Treasury bill, respectively. Annual returns assume the reinvestment of interest income and dividends, no transaction costs, no management or servicing fees, and the rebalancing of the portfolio every year.
The purpose of the hypothetical illustrations is to show how portfolios may be created with different risk and return characteristics to help meet a customer's goals. You should choose your own investments based on your particular objectives and situation. Remember, you may change how your account is invested. Note that changes may result in gains or losses. Be sure to review your decisions periodically to make sure they are still consistent with your goals. You should also consider all of your investments when making your investment choices. The S&P 500® Index is a registered trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Fidelity Distributors Corporation and its affiliates. It is an unmanaged index of the common stocks of 500 widely held U.S. stocks that includes the reinvestment of dividends. It is not possible to invest directly in the index.
Information provided is general and educational in nature. It is not intended to be, and should not be construed as, legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Consult an attorney or tax advisor regarding a specific legal or tax situation.
U.S. stock prices are more volatile than those of other securities. Government bonds and corporate bonds have more moderate short-term price fluctuations than stocks but provide lower potential long-term returns. U.S. Treasury bills maintain a stable value (if held to maturity), but returns are only slightly above the inflation rate.
-
For this chart, the estimates assume life expectancy at age 65 of 17 and 20 years, for males and females, respectively. A healthcare cost inflation rate of 7% is used; underlying this assumption are cost of service increase rates that vary by type of service, ranging from 4% to 9%. The estimates are representative of the amount needed in taxable account. A 5% after-tax rate of return is assumed on savings in retirement. Medical costs are assumed to be incurred uniformly in each year in retirement after age 65. Estimates are calculated for an 'average' retiree. Actual costs will vary depending on actual health status, area, and longevity. Individuals who deviate from this 'average', could require a smaller or larger amount of savings.
These estimates assume that there is no employer sponsored post retirement health care coverage. These estimates assume that the retiree has traditional Medicare coverage, elects Medicare Part D, and, by virtue of their income level, continues to receive the current government Part B subsidy.
These savings amounts do not consider the expected costs of expenses related to over the counter drugs, dental care, or nursing home care.
| Fidelity Brokerage Services, Member NYSE, SIPC | 483099.7.0 |
