BOSTON--(BUSINESS WIRE)--Fidelity Investments®, which helps more than 24 million individuals save and is the number one provider of 401(k)s and IRAs, today announced the introduction of an innovative new program designed to motivate investors to accelerate their retirement preparedness through a matching contribution component to qualifying Individual Retirement Accounts. Known as IRA MatchSM, this first-of-its-kind program encourages investors to increase their retirement savings by matching annual contributions to new or existing IRAs by up to 10 percent each year for three consecutive years1.
“An IRA is a great tool to help consumers save and invest tax efficiently for retirement. We believe this program, which leverages one of the most powerful savings incentives from 401(k) plans—the employer match on an employee’s contributions—will encourage more individuals to take action to supplement workplace savings to help ensure they can build a nest egg that lasts their lifetime,” said Lauren Brouhard, senior vice president for Retirement, Fidelity Investments.
As pension plans have waned and the burden of planning for retirement has increasingly shifted to individuals, more and more Americans are responsible for taking care of their own retirement, which could last 30 years or more. To ensure these years are lived comfortably, securing higher levels of savings earlier is critical. One of the most powerful ways to improve readiness is to save more, even if only in small amounts, which could grow significantly over time. In fact, Fidelity research shows that for a household making $60,000 a year, increasing savings by just one percent more equals about $50 a month, which could translate into an additional $270 a month in retirement income2.
“Unfortunately, too many Americans aren’t adequately prepared to meet their retirement needs. At Fidelity, we’re committed to finding compelling ways to motivate people to save more now to help ensure greater financial security for tomorrow,” said Brouhard. “We’ve learned over the years how an employer match encourages 401(k) participants to save and contribute regularly, and we wanted to bring this powerful behavioral draw to our IRA customers to not only motivate them to choose a Fidelity IRA, but also to continue growing their savings even more.”
The introduction of IRA Match is Fidelity’s latest product innovation to help people boost their retirement preparedness, regardless of age or income level. Other solutions include the convenience of ‘automatic investments,’ where customers can have a certain amount taken from a bank (by EFT) or another Fidelity account and deposited into their IRA at a time when they choose (up to the maximum contribution limits). In addition, customers can contribute to an IRA quickly and easily through Fidelity’s mobile app, using mobile check deposit. Finally, there are online tools, including Portfolio Review3, which analyzes how holdings are aligned to a target asset mix, identifies an appropriate asset mix that matches specified goals and then suggests an investment strategy designed to help keep people on track.
IRA Match Sounds Good, But How Does it Work?
The match is
available to new or existing customers who transfer a Roth, Traditional
or Rollover IRA to Fidelity. When this occurs, and an individual makes
contributions to their IRA over the next three years, Fidelity will
match their annual contribution up to 10 percent. Direct rollovers from
a 401(k) or 403(b) plan are not eligible. So, for example, if a customer
transfers $500,000, he or she will earn 10 percent on future
contributions. If a contribution of $5,500 is made in the first year,
that customer will receive a $550 match.
| Reward Tiers: | ||||||||||||||||||
| $10,000 | 1 percent | |||||||||||||||||
| $50,000 | 1.5 percent | |||||||||||||||||
| $100,000 | 2.5 percent | |||||||||||||||||
| $250,000 | 5 percent | |||||||||||||||||
| $500,000 | 10 percent | |||||||||||||||||
No matter what tier an investor falls into, IRA Match can help make a meaningful impact on one’s income in retirement. Investors interested in signing up may do so by visiting fidelity.com/iramatch or calling a Fidelity specialist at 1-800-FIDELITY.
To learn more about IRAs and how they can fit into your overall financial plan, visit www.fidelity.com/ira. Fidelity also has a number of helpful Viewpoints articles, such as “Two big IRA pitfalls to avoid.” For information on how setting aside a little bit today can make a big difference in the long run, “Just 1% more can make a big difference” provides examples of the impact one percent can make, ways to save and video content.
About Fidelity Investments
Fidelity’s goal is to make
financial expertise broadly accessible and effective in helping people
live the lives they want. With assets under administration of $5.0
trillion, including managed assets of $2.0 trillion as of January 31,
2015, we focus on meeting the unique needs of a diverse set of
customers: helping over 24 million people investing their own life
savings, nearly 20,000 businesses to manage their employee benefit
programs, as well as providing nearly 10,000 advisory firms with
technology solutions to invest their own clients’ money. Privately held
for nearly 70 years, Fidelity employs 41,000 associates who are focused
on the long-term success of our customers. For more information about
Fidelity Investments, visit www.fidelity.com.
Investing involves risk, including risk of loss.
Fidelity Brokerage Services LLC, Member NYSE, SIPC
900 Salem
Street, Smithfield, RI 02917
715943.1.0
© 2015 FMR LLC. All rights reserved.
1 This offer is valid for new or existing Fidelity IRA customers. Direct rollovers from workplace plans into a Fidelity IRA are not eligible. In order for your IRA to be eligible to receive the IRA Match bonus, you must either designate an existing eligible Fidelity brokerage IRA or open a new eligible Fidelity brokerage IRA (Rollover IRA, Traditional IRA, Roth IRA) during the Qualification Period (within 60 days of registration). Qualifying Deposits (rollovers and transfers from non-Fidelity IRAs) received in the Fidelity IRA during the Qualification Period will result in an annual matching bonus on any subsequent annual contributions made to that IRA for the current contribution year and the next two successive contribution years (the “Match Period”), as follows: deposits of $10,000 to $49,999 may receive a 1% match, deposits of $50,000 to $99,999 may receive a 1.5% match, $100,000 to $249,999 may receive a 2.5% match, deposits of $250,000 to $499,999 may receive a 5% match, deposits of $500,000 or more may receive a 10% match. During the Match Period, the IRA Match bonus will apply for up to three years from when the Match Period begins or until a customer reaches the maximum aggregate IRA Match bonus of $1,950, whichever occurs sooner. Offer is nontransferable, limited to one offer per individual per rolling 12 months, and, with respect to the IRA that receives the deposit, one offer per Match Period. This offer may not be combined with other offers. Fidelity reserves the right to modify these terms and conditions or terminate this offer at any time. Other terms and conditions, or eligibility criteria, may apply. Please go to www.fidelity.com/IRAmatch to learn more.
2 Hypothetical examples assume that the individual or household increases deferral rate by one percent at age 35, continues saving until retirement age 67, lives through age 93, and receives a 1.5% real (inflation-adjusted) increase in wages per year. Rate of return is 7.0% and consists of 4.5% real return and 2.5% inflation. These illustrations assume that deferral percentage rates stay constant throughout the participants’ working careers. Estimated increases in retirement monthly income are in constant 2015 dollars. It is assumed that upon retirement the real (inflation-adjusted) dollar amount is withdrawn annually through age 93, and that the participant took no loans or hardship withdrawals from his or her workplace plan. All dollars shown (including increases to monthly retirement paycheck) are pretax dollars. Upon distribution, applicable federal, state, and local taxes are due. No federal, state, or local taxes; inflation; or account fees or expenses were considered. If they were, returns and monthly increases would be lower. Actual realized value may be significantly more or less that this illustration.
3 Guidance provided by Fidelity through Portfolio Review is educational in nature, is not individualized, and is not intended to serve as the primary basis for your investment or tax-planning decisions.
