Survey Reports How Working Americans Are Doing Against Each Suggested Resolution

BOSTON, December 23, 2008 After a year of significant volatility and financial uncertainty for investors, Fidelity is outlining several age-based retirement resolutions for Americans to consider to kick-off the New Year with more confidence. The resolutions offer guidance for investors in three different life stages, whether they are getting started, saving or preparing for retirement. The suggested resolutions are accompanied by a survey of 2,000 working Americans that outlines the percentage of respondents who already have completed each action¹.

"The New Year offers investors an opportunity to take better control of their finances and stay on track throughout 2009," said Carolyn Clancy, executive vice president, Fidelity Investments. "These resolutions offer investors very specific steps to consider that can provide more financial discipline and better prepare them for retirement."

Retirement Resolutions for Investors Getting Started (25-35 Years Old)

Investors in their twenties and early thirties have the most time to prepare for retirement, but instilling good habits early must take place to minimize the need to catch up significantly later on in life. Key resolutions identified by Fidelity for this age group include the following, with the percentage of workers who have completed each action:

•		Enroll and contribute to your workplace savings plan (47 percent of responding workers have completed this action) Only half of young investors are currently utilizing a tax-deferred workplace retirement savings plan, such as a 401(k) or 403(b). For those not yet participating, new workplace offerings such as auto-enrollment and annual increase programs can help young investors get started and stay on track with retirement savings efforts. Additionally, all workplace plan participants, regardless of age, should be sure to contribute at least enough to receive any and all matching employer contributions if available. Investors also should review their portfolio at least once a year, and rebalance as necessary.
•		Develop a plan to reach long-term goals (25 percent of responding workers have completed this action) A quarter of investors in this life stage have created a plan that addresses long-term goals like saving for retirement based on their current and desired retirement lifestyle. In general, Fidelity believes that investors should consider saving for retirement as a top priority, as the burden for covering living expenses in retirement is increasingly shifting to individuals.
•		Open and contribute to an IRA based on your savings goals (20 percent of responding workers have completed this action) Beyond a workplace savings plan, investors should consider saving more for retirement through tax-advantaged accounts. Many investors are not aware that contributing to an individual retirement account can significantly improve retirement readiness, especially if they don!|t have access to a workplace savings account or are already contributing the maximum amount to their workplace savings plan. For example, an investor who contributes the maximum amount ($5,000) to their IRA every year starting at 25 years old, could potentially have $1.6 million in savings at age 702. If investors qualify, they should consider a Roth IRA as a complement to their pre-tax retirement savings. Roth contributions can help create additional flexibility in retirement to respond to what is always a great unknown future tax rates.

Retirement Resolutions for Investors in the Accumulation Stage (36-54 Years Old)

As investors enter their peak earning years and are saving more, they generally need to refine and manage their retirement strategy and contribution levels. Suggested resolutions for this life stage, with the number of responding workers who have completed these actions, include the following:

•		Monitor and rebalance your portfolio at least once a year (25 percent of responding workers have completed this action) A quarter of working Americans have reported that they review and rebalance their investments at least once a year to make sure they're comfortable with the level of risk. Proper asset allocation becomes more important during times of extreme market expansion and contraction, as asset classes grow at different rates and lose value at varying levels.
•		Catch up and/or max out on retirement savings vehicles (19 percent of responding workers have completed this action) As an investor's income level increases, contributions to retirement saving accounts also should generally see an uptick. Nearly one-in-five working Americans are maxing out or making catch-up contributions to workplace and personal retirement savings accounts. If their plan allows, workers ages 50 and older can contribute an additional $5,500 to their workplace retirement plan in 2009. IRAs also allow an additional $1,000 in contributions for 2009 for older workers.
•		Simplify and consolidate your assets (11 percent of responding workers have completed this action) Few working Americans in their accumulation phase have consolidated workplace retirement plans from previous employers into one Rollover IRA. For many, the Rollover IRA offers the most compelling benefits for managing retirement savings. Consolidation offers ease of management, more control, and in most cases, investment choices in an IRA will be broader and include not only mutual funds, but also individual securities and CDs.

During an investor's initial two life stages, they should maximize the tax-deferred benefits of workplace savings plans first and create a long-term financial plan based on goals and priorities," said Clancy. "Before contributing to a tax-advantaged IRA, we recommend that investors reduce high interest credit card debt and build an emergency fund. These steps will help investors build a solid financial foundation entering the next life stage."

Retirement Resolutions for Investors in the Pre-Retirement Stage (55+ Years Old)

Investors who are within five to 10 years of retirement should anticipate needs and take action to make sure they are prepared. Following are some key resolutions for pre-retirees with the percentage of responding workers who have completed this action:

•		Create a retirement income plan to determine when you can retire and ensure a steady paycheck to cover your most important expenses in retirement (26 percent of responding workers have completed this action) !V Just one-in-four working Americans have created a retirement income plan, factoring in key components such as a budget, an asset allocation strategy and a withdrawal plan to ensure a steady paycheck throughout their entire retirement. Creating an income plan that manages risks, such as longevity, market volatility and rising healthcare costs, is critical, as the median retirement savings of an American household is $22,500 and is on track to replace only 58 percent of pre-retirement income3.
•		Sign up for Social Security and Medicare (45 percent of responding workers, 62 and older, have completed this action) Americans can sign up for Social Security benefits as early as age 62. When to begin taking Social Security can be a complex decision with multiple payment strategies to consider, including: Waiting past age 62 before taking payments to obtain higher Social Security payments. This strategy is often used by investors who have other sources of retirement income, are in good health and planning for a longer retirement or plan to continue working. Waiting past age 62 for higher payments and bridging an income gap with funds, bonds or annuities. For those who want higher payments later on to cover rising expenses like healthcare, but need supplemental income until Social Security payments start, this strategy allows for maximum payments while also generating short term income to cover immediate expenses. Taking lower payments at age 62 for immediate expenses like healthcare costs. Additionally, this strategy allows investors to potentially invest payments or preserve other assets.

•		Research long-term care insurance needs (15 percent of responding workers have completed this action) Rising healthcare costs could have a devastating impact on an investor!|s retirement income plan. Fidelity estimates that a 65-year-old couple retiring in 2008 will need approximately $225,000 to fund out-of-pocket medical expenses in retirement. Investors should make sure they include anticipated medical expenses, including long-term care, in their retirement expense budget.

For more retirement information from Fidelity, including tools like Portfolio Review, Retirement Quick Check or Retirement Income Planner, investors can call 1-800-FIDELITY, visit www.fidelity.com, or meet with a representative at one of Fidelity's 128 Investor Centers nationwide.

Resolutions Survey Data

Resolutions data was collected through a national online survey of more than 2,000 Americans who work full-time; are 25 years or older; earn $20,000 a year or more; if married/partnered, spouses also are not yet retired; and are financial decision makers for their household. Interviews were completed for Fidelity by Richard Day Research of Evanston, Ill., between September 3 and 7, 2008.

About Fidelity Investments

Fidelity Investments is one of the world's largest providers of financial services, with custodied assets of over $2.5 trillion, including managed assets of over $1.2 trillion as of November 30, 2008. Fidelity offers investment management, retirement planning, brokerage, and human resources and benefits outsourcing services to 24 million individuals and institutions as well as through 5,500 financial intermediary firms. The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, the largest mutual fund supermarket and a leading online brokerage firm. For more information about Fidelity Investments, visit Fidelity.com

¹ Research conducted by Richard Day Research for Fidelity Investments, September 2008

² This hypothetical example assumes the following (1) annual IRA contributions on 1/1 of each year starting in 2008 for the age ranges shown, (2) annual $5,000 beginning in 2008 (3) an additional $1,000 catch-up contribution for each year in which the investor is age 50 or older, (4) an annual rate of return of 7% and (5) no taxes on any earnings within the IRA. The ending values do not reflect taxes, fees or inflation. If they did, amounts would be lower. Earnings and pre-tax (deductible) contributions from Traditional IRAs are subject to taxes when withdrawn. Earnings distributed from Roth IRAs are income tax free provided certain requirements are met. IRA distributions before age 59 1/2 may also be subject to a 10% penalty. Systematic investing does not ensure a profit and does not protect against loss in a declining market.

³ Fidelity Retirement Index, Spring 2007. Interviews for the Spring 2007 Index were completed for Fidelity by Richard Day Research of Evanston, Ill. between January 15 and 18, 2007. Index calculations rely on Fidelity!|s asset-liability modeling engine, which generates the percentage of potential pre-retirement net income that each individual American household surveyed is likely to replace upon retirement. The Index represents the median (or midpoint) of the approximately 2,000 individual household percentages produced. Results were weighted to reflect demographic trends in the United States.

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Retirement Income Planner is an educational tool developed and offered for use by Strategic Advisers, Inc., a registered investment adviser and a Fidelity Investments company.

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