Fidelity Freedom Lifetime 2026: Guaranteed Retirement Income Coming to 401(k) Plans — Nationwide and New York Life Partner with Fidelity
June 14, 2026 — In a move that could reshape how millions of Americans fund their retirement, Fidelity Investments® has announced plans to launch Fidelity Freedom® Lifetime, a suite of target date collective investment trusts (CITs) with a built-in guaranteed lifetime income option. The product, expected to roll out in early 2027, will be available to employers and plan sponsors on Fidelity’s recordkeeping platform — and it’s backed by two of the most financially secure insurance companies in the United States: Nationwide® and New York Life®.
The announcement, made via Business Wire on June 10, 2026, represents the latest step in Fidelity’s push to bridge the gap between retirement saving and retirement spending. With $770 billion in target date assets under management and more than 30 years of target date experience, Fidelity is betting that guaranteed income — once the exclusive domain of traditional pensions — can be brought to the modern 401(k) plan.
What Is Fidelity Freedom Lifetime?
Fidelity Freedom Lifetime is a new series of target date collective investment trusts that combine Fidelity’s time-tested target date strategy with an insurance-backed guaranteed income option. Unlike traditional target date funds that simply shift from stocks to bonds as you approach retirement, Freedom Lifetime includes a strategic allocation to an insurance pool — giving participants the option to convert a portion of their savings into a guaranteed lifetime income stream.
Here’s what makes Freedom Lifetime different from standard target date funds:
- Built-in insurance allocation: A portion of the portfolio is allocated to group annuity contracts issued by Nationwide and New York Life during the accumulation phase.
- Guaranteed income option: At retirement age, participants can elect to convert savings into rollover individual retirement annuities that provide predictable monthly payments for life.
- Blended investment approach: The portfolios invest in a mix of active and index underlying funds, plus the insurance pool, with active asset allocation across different asset classes.
- Digital modeling tools: Participants can model scenarios to see potential retirement income and obtain real-time guaranteed income quotes through Fidelity’s integrated recordkeeping platform.
- Competitive pricing: Asset-based pricing dependent on share class and vintage, keeping costs aligned with the value delivered.
“Increasingly, employees are looking for more clarity in their retirement income streams,” said Molly Cunningham, head of Workplace Lifetime Financial Help at Fidelity. “In designing Freedom Lifetime, our priority was to maximize the value of lifetime income while keeping the participant and plan sponsor experience simple and easy to adopt.”
How the Guaranteed Income Works
The mechanics of Freedom Lifetime are designed to be straightforward for both plan sponsors and participants. Here’s the step-by-step process:
- Accumulation phase: While working, the employee’s contributions are invested in a Freedom Lifetime CIT that includes an allocation to group annuity contracts from Nationwide and New York Life.
- Modeling and planning: As retirement approaches, the employee uses Fidelity’s digital tools to model different income scenarios and see how much guaranteed monthly income their savings could generate.
- Election at retirement: When eligible, the employee chooses to convert a portion of their CIT balance into guaranteed lifetime income by purchasing a rollover individual retirement annuity from one of the partner insurers.
- Lifetime payments: The annuity provides consistent, predictable monthly payments for the rest of the retiree’s life — similar to a traditional pension but funded by the employee’s own 401(k) savings.
- Remaining balance: Any savings not converted to the annuity remain invested in the target date portfolio, providing flexibility for lump-sum needs or legacy goals.
It’s important to note that assets used to purchase the income stream will no longer be liquid — a trade-off between flexibility and the security of guaranteed lifetime payments. Annuity guarantees are subject to the claims-paying ability of the issuing insurance companies, which is why Fidelity chose two of the strongest insurers in the market.
The Insurance Partners: Nationwide and New York Life
Fidelity is not an insurance company and makes no guarantees itself — the lifetime income promise rests entirely on the financial strength of its two insurance partners. Here’s how they stack up:
| Metric | Nationwide | New York Life |
|---|---|---|
| Founded | 1926 (100+ years) | 1845 (180+ years) |
| Fortune Rank | Fortune 100 | Fortune 100 |
| AM Best Rating | A+ (Superior) | A++ (Superior — highest) |
| S&P Rating | A+ (Strong) | AA+ (Very Strong) |
| Moody’s Rating | — | Aa1 (High Grade) |
| Fitch Rating | — | AAA (Highest) |
| Key Strength | 100+ years of protection; decade+ of in-plan lifetime income solutions | Largest mutual life insurer in U.S.; highest ratings from all 4 major agencies |
“Nationwide is pleased to extend our strong ongoing relationship with Fidelity,” said Kevin Jestice, president of Retirement Solutions at Nationwide. “As a protection company with 100 years of experience safeguarding people and businesses, and more than a decade of experience with lifetime income solutions specifically designed for use within employer-sponsored retirement plans, we’ve seen how essential these offerings are.”
David Cruz, head of Institutional Annuities at New York Life, added: “For more than 180 years, New York Life has helped individuals turn savings into lasting financial security. As the largest mutual life insurance company in the U.S., we’re proud to bring our deep expertise in guaranteed income solutions to Fidelity Freedom Lifetime.”
New York Life holds the highest financial strength ratings currently awarded to any U.S. life insurer from all four major credit rating agencies — a distinction that provides meaningful reassurance for workers betting their retirement on these guarantees.
Fidelity’s Retirement Income Strategy
Freedom Lifetime is not Fidelity’s first guaranteed income product. In 2024, the company launched Guaranteed Income Direct, which allows employees to convert all or a portion of their 401(k), 403(b), or 457(b) savings into an immediate income annuity providing consistent, pension-like payments. Freedom Lifetime builds on this foundation by embedding the guaranteed income option inside the target date fund itself — making it a seamless part of the default investment path rather than a separate election.
Fidelity’s target date platform is massive: more than $770 billion in assets, 18,000+ plan sponsor clients, and over 7 million participants invested. The firm helps more Americans with retirement than any other company, based on defined contribution plan assets administered and number of participants. This scale means Freedom Lifetime has the potential to bring guaranteed retirement income to millions of workers who currently have no access to pension-like benefits.
The portfolio management team includes co-portfolio managers Andrew Dierdorf, Brett Sumsion, Finola McGuire Foley, and Cait Dourney Earle, who collectively have more than 85 years of experience at Fidelity and are grounded in the firm’s global research organization.
What This Means for American Workers
The shift from defined-benefit pensions to defined-contribution 401(k) plans over the past four decades has transferred retirement risk from employers to employees. Workers are now responsible for saving enough, investing wisely, and managing withdrawals to avoid outliving their money — a challenge that financial experts call “longevity risk.”
Freedom Lifetime addresses longevity risk directly by offering a mechanism to convert savings into income that cannot be outlived. Key implications for workers include:
- Pension-like security in a 401(k): For the first time, millions of workers may have access to guaranteed lifetime income through their workplace retirement plan without needing to research and purchase an annuity on their own.
- Simplified decision-making: The income option is built into the default investment path, reducing the complexity and behavioral barriers that prevent many retirees from annuitizing their savings.
- Institutional pricing: Because the annuities are purchased through a large institutional pool rather than retail channels, pricing may be more competitive than what individuals could obtain on their own.
- Flexibility preserved: Participants choose how much to convert — they don’t have to annuitize everything. The remaining balance stays invested for liquidity and legacy needs.
- Backed by top-rated insurers: The guarantees come from Nationwide (A+ S&P) and New York Life (top ratings from all four agencies), providing a level of security that smaller annuity providers cannot match.
How Freedom Lifetime Compares to Other Retirement Income Options
Workers approaching retirement have several ways to generate income from their savings. Here’s how Freedom Lifetime stacks up against the alternatives:
| Option | Guaranteed Income? | Liquidity | Complexity | Best For |
|---|---|---|---|---|
| Fidelity Freedom Lifetime | Yes (optional) | Partial (annuitized portion illiquid) | Low — built into target date fund | Workers who want default-path guaranteed income |
| Traditional Target Date Fund | No | Full | Low | Accumulation-focused savers |
| Immediate Income Annuity (retail) | Yes | None (fully annuitized) | High — requires shopping and comparison | Those comfortable managing their own annuity purchase |
| Systematic Withdrawals (4% rule) | No | Full | Medium | Those willing to accept market and longevity risk |
| Fidelity Guaranteed Income Direct | Yes | None (fully annuitized) | Medium — separate election required | Those who want to annuitize outside their target date fund |
Freedom Lifetime’s key innovation is reducing the complexity barrier. By embedding the guaranteed income option inside the target date fund — the default investment for most 401(k) participants — Fidelity is making annuitization a natural part of the retirement journey rather than a separate, intimidating decision.
Frequently Asked Questions
Q: When will Fidelity Freedom Lifetime be available?
A: Fidelity plans to launch Freedom Lifetime in early 2027. It will be available to employers and plan sponsors on Fidelity’s recordkeeping platform.
Q: Is the guaranteed income really guaranteed for life?
A: Yes — the income stream is backed by annuity contracts from Nationwide and New York Life, both highly rated insurers. However, the guarantees are subject to the claims-paying ability of the issuing insurance companies. New York Life holds the highest ratings from all four major credit rating agencies (AM Best A++, Fitch AAA, Moody’s Aa1, S&P AA+).
Q: Do I have to convert all my savings to the guaranteed income option?
A: No. You choose how much of your Freedom Lifetime balance to convert. Any savings not converted remain invested in the target date portfolio, giving you flexibility for other needs.
Q: What happens to the money I convert to guaranteed income?
A: The converted assets are used to purchase a rollover individual retirement annuity from Nationwide or New York Life. These assets will no longer be liquid — you cannot withdraw them as a lump sum — but they will provide predictable monthly payments for life.
Q: How is this different from Fidelity Guaranteed Income Direct?
A: Guaranteed Income Direct (launched 2024) is a separate election that allows you to convert 401(k)/403(b)/457(b) savings into an immediate income annuity. Freedom Lifetime builds the guaranteed income option directly into the target date fund itself, making it part of the default investment path rather than a separate decision.
Q: What are the fees for Freedom Lifetime?
A: Fidelity says the series will offer “competitive pricing, with asset-based pricing dependent on share class and vintage.” Specific fee schedules will be disclosed closer to the 2027 launch.
Q: Is my principal guaranteed in Freedom Lifetime?
A: No. Like all target date investments, principal invested is not guaranteed at any time, including at or after the target date. Only the portion converted to an annuity provides guaranteed income — and that guarantee depends on the insurer’s claims-paying ability.
Watch: How Lifetime Income Annuities Work
Related Resources
- AM Best Insurance Ratings — Check Your Insurer’s Financial Strength
- NAIC Consumer Resources — Insurance Regulation and Policyholder Protections
- Social Security Administration — Retirement Benefits and Planning Tools
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Source: Fidelity Investments press release via Business Wire, June 10, 2026. InsuranceNewsNet.com.
