Planning For The Golden Years: Navigating Fidelity's Retirement Investment Options

Investing in Fidelity for retirement can be a great way to grow your savings. Fidelity offers a range of investment options, including mutual funds, exchange-traded funds (ETFs), stocks, bonds, and more. With their help, you can build a diversified portfolio tailored to your retirement goals, whether you're just starting to save or already living in retirement. They also provide tools and tips to help you adjust your plan as your life changes, ensuring you stay on track. Additionally, Fidelity offers managed accounts where experienced professionals handle your investments for you. They also provide advisory services, such as Fidelity Go® and Fidelity Managed FidFolios℠, which build and monitor your investment strategy.

Fidelity's top-performing funds for retirement

Fidelity Investments has a wide selection of actively managed mutual funds available to retail investors. Here are some of the top-performing funds for retirement:

Fidelity Select Energy Portfolio (FSENX)

The FSENX fund provides exposure to energy sector companies, including legacy oil, gas, and coal companies, as well as cleaner nuclear, geothermal, and renewable energy companies. This fund is ideal for investors who believe that high oil and gas prices are here to stay. The fund's top holdings include Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), and ConocoPhillips (COP). Over the past 12 months, it has returned 71.1% with an expense ratio of 0.85%.

Fidelity Select Semiconductors Portfolio (FSELX)

The FSELX fund primarily invests in companies that design, manufacture, or sell semiconductor chips or components. The global semiconductor industry has been facing supply shortages, but the demand for semiconductor processing power continues to boom. The fund's top holdings include Nvidia Corp. (NVDA), Marvell Technology Inc. (MRVL) and Microchip Technology Inc. (MCHP). It has returned 27.4% in the last year with an expense ratio of 0.70%.

Fidelity Select Insurance Portfolio (FSPCX)

The FSPCX fund invests primarily in companies that specialize in underwriting, reinsuring, selling, distributing, or placing property, casualty, life, or health insurance. The fund has generated an average annual return of 11.4% since its inception in 1985. Insurance companies benefit from higher interest rates, and its top holdings include Marsh & McLennan Cos. Inc. (MMC), Travelers Cos. Inc. (TRV), and Chubb Ltd. (CB). It has returned 25.7% in the last year with an expense ratio of 0.83%.

Fidelity Nasdaq Composite Index Fund (FNCMX)

The FNCMX fund is designed to closely track the price and yield of the Nasdaq Composite Index, investing at least 80% of its assets in common stocks included in the Nasdaq. The fund is heavily skewed towards technology, with 49.69% in information technology and 15.01% in communication services. Its top holdings include Microsoft, Apple, Nvidia, Amazon, and Alphabet. The fund has returned 15.4% annually over the past 10 years with an expense ratio of 0.29%.

Fidelity Blue Chip Growth Fund (FBGRX)

FBGRX is an actively managed fund dating back to 1987, with a competitive expense ratio of 0.48%. The fund's current 360 holdings have a large-cap growth focus, with top holdings including Nvidia, Microsoft, Amazon, Apple, Alphabet, and Meta Platforms Inc. (META). Over the past 10 years, this fund has returned 17.1% annually, outperforming the Russell 1000 Growth Index.

Fidelity Select Construction and Housing Portfolio (FSHOX)

The FSHOX fund has achieved an annualized 15.2% total return over the last 10 years, with dividends reinvested. This mutual fund tracks companies like Home Depot Inc. (HD), Lowe's Cos Inc. (LOW), PulteGroup Inc. (PHM), and Builders FirstSource Inc. (BLDR). FSHOX has a long history dating back to 1986 and charges a 0.71% expense ratio.

Fidelity's retirement accounts

Fidelity offers a range of retirement accounts to help you save for your future. Here's a detailed overview of Fidelity's retirement accounts and some investment options to consider:

Fidelity Retirement Accounts:

• Roth IRA: This is a popular option due to its tax advantages. It offers tax-free growth potential and tax-free withdrawals in retirement. You can also access your contributions penalty-free at any time.
• Traditional IRA: While contributions may be tax-deductible, you'll have to pay taxes upon withdrawal in retirement. A Traditional IRA is a good option if you expect to be in a lower tax bracket during retirement.
• Rollover IRA: If you change jobs, a Rollover IRA allows you to consolidate your savings from previous employers into a single account. This simplifies your retirement savings and provides more control.
• Managed Accounts: Fidelity offers various managed account services, such as Fidelity Go® and Fidelity Wealth Management. These provide professional investment management and customized planning based on your financial goals.

Investment Options:

• Mutual Funds: Fidelity offers a wide range of mutual funds, including Fidelity Select Construction and Housing Portfolio (FSHOX) and Fidelity Nasdaq Composite Index Fund (FNCMX). These funds have delivered strong performance over the past decade.
• Exchange-Traded Funds (ETFs): ETFs are a low-cost, diversified investment option. Fidelity offers various ETFs, including active equity, factor, sector, stock, and bond ETFs.
• Stocks: You can invest in US stocks online with $0 trading commissions through Fidelity. This gives you the flexibility to choose individual stocks that align with your investment strategy.
• Bonds and Fixed-Income Options: Fidelity offers an extensive selection of bonds, CDs, and money market funds with competitive pricing. These provide regular interest payments and can help diversify your portfolio.
• Annuities: Annuities are insurance contracts that provide guaranteed income during retirement. Fidelity offers both deferred income annuities and immediate fixed income annuities.

Fidelity's retirement savings tips

Open a retirement account

There's no cost or minimum balance to open a Fidelity retirement account. You can create a free and flexible plan to save for retirement, which you can adjust as your life changes and priorities shift.

Save at least 15% of your income annually

Fidelity recommends saving at least 15% of your income each year for retirement. This will help ensure you have enough money to maintain your desired standard of living when you stop working.

Explore different investment options

Fidelity offers a range of investment options to help your savings grow, including mutual funds, exchange-traded funds (ETFs), stocks, bonds, and money market funds. You can also consider investing in a Roth IRA, which offers tax-free growth and withdrawals in retirement.

Take advantage of professional advice

Fidelity's team of advisors can provide timely tips and guidance to help you save and invest smartly for retirement. You can also consider using their managed account services, such as Fidelity Go, which builds and monitors an investment strategy for you.

Diversify your portfolio

Diversifying your investments across different asset classes and sectors can help reduce risk and improve your portfolio's long-term performance. Fidelity offers various tools and resources to help you build a diversified portfolio, including their asset management funds and target date funds.

Stay informed and adjust your strategy

Stay up-to-date with market trends and adjust your investment strategy as needed. Fidelity provides resources like the Planning and Guidance Center to help you create and monitor your financial goals.

Remember, investing involves risk, and the value of your investments may fluctuate. It's important to carefully consider your own financial situation and seek professional advice before making any investment decisions.

Fidelity's retirement planning tools

Fidelity offers a range of tools to help you plan for retirement. These tools can help you to create a clear plan to save for retirement, with the flexibility to adjust as your life changes and priorities shift.

The Planning & Guidance Center is a tool that gives you a holistic view of your financial plan. With this tool, you can see how prepared you are for retirement, review and evaluate different investment strategies, and get a report with clear next steps to consider. This tool can also be used to get an investment strategy that suits your goals.

Fidelity also offers a range of managed, diversified portfolio strategies that can be personalized to reflect your investment preferences. These accounts are managed by experienced investment professionals and are supported by ongoing research. The Portfolio Advisory Services account is one such service, designed to help you reach your goals.

Fidelity also offers a range of investment options for those who want to manage their own investments. These include exchange-traded funds (ETFs), which are a low-cost option that provides diversification, tax efficiency, and broad market exposure. You can also invest in US stocks online with $0 trading commissions.

Additionally, Fidelity provides a range of calculators to help you plan for retirement, including the Retirement Income Calculator, which gives you an estimate of how much you could spend each month in retirement, and the Retirement Strategies Tax Estimator, which shows how a Roth IRA conversion could affect your taxes.

Fidelity's investment options

Fidelity offers a wide range of investment options to help you save for retirement. Here are some of the key investment choices available:

Managed Accounts

Fidelity offers managed accounts where experienced investment professionals will build and manage a portfolio for you. This includes the Portfolio Advisory Services account, which is designed to help you reach your financial goals, and separately managed accounts, which are built around a specific investment strategy.

Mutual Funds and ETFs

Fidelity offers a wide variety of mutual funds and exchange-traded funds (ETFs) that can provide income and growth. These funds are managed by Fidelity and can be used to build a diversified portfolio. Examples include Fidelity Simplicity RMD Funds, which automate required minimum distributions, and Fidelity Managed Retirement Funds, which provide a single investment asset allocation strategy that aligns with your age.

Bonds and Fixed Income

Fidelity offers an extensive selection of bonds, CDs, and money market funds. These investments generally provide regular interest payments and can be a low-risk option for retirement savings. For example, money market funds invest in short-term debt securities with low credit risk and provide easy access to your money.

Annuities

Annuities are insurance contracts that provide guaranteed income during retirement. Fidelity offers various annuity options, including deferred income annuities and immediate fixed income annuities, which can provide guaranteed income for life or a set period.

Individual Retirement Accounts (IRAs)

Fidelity offers IRAs, which are tax-advantaged accounts that allow you to save for retirement. This includes Roth IRAs, which offer tax-free growth and withdrawals, and traditional IRAs, which allow you to reduce your taxable income by deducting your contributions.

Fidelity Freedom Funds

Fidelity Freedom Funds are diversified single-fund investment strategies. You choose the target retirement year, and Fidelity builds a portfolio for that timeline, reducing risk as retirement nears.

Fidelity Asset Manager Funds

Fidelity Asset Manager funds offer a diversified single-fund strategy based on your risk tolerance. This can help you maintain a portfolio that aligns with your risk preferences.

Exchange-Traded Funds (ETFs)

Fidelity offers a wide range of ETFs, including active equity, factor, sector, stock, and bond ETFs. ETFs provide diversification, tax efficiency, and broad market exposure at a low cost.

Stocks

You can invest in US stocks online with $0 trading commissions through Fidelity. This allows you to choose individual stocks that align with your investment strategy.

Top-Performing Fidelity Funds

Fidelity also offers several top-performing mutual funds with strong returns over the past decade. These include the Fidelity Select Semiconductors Portfolio (FSELX), which returned an annualized 26.9% over the last 10 years, and the Fidelity Blue Chip Growth Fund (FBGRX), which beat the Russell 1000 Growth Index with an annualized return of 17.1% over the same period.

Frequently asked questions