When you leave a job, you may be wondering what to do with the money in your 401k. One option is to roll it over to another retirement account, such as an Individual Retirement Account (IRA). A rollover is a tax-free transfer of assets from one retirement account to another. Fidelity is a financial services company that offers a variety of retirement accounts, including IRAs. If you are considering rolling over your 401k to Fidelity, there are a few things you should keep in mind. First, you will need to determine if your 401k plan allows rollovers. If it does, you will need to contact Fidelity to open an IRA. Once you have opened an IRA, you can request a rollover from your 401k plan administrator. The administrator will then send the money from your 401k to Fidelity. The rollover process can take a few weeks, so it is important to start the process as soon as possible.
Fidelity Rollover Process
Rolling over your 401(k) to Fidelity can provide you with greater control over your retirement savings, access to a wide range of investment options, and professional guidance from a trusted financial institution. Here’s a step-by-step guide to the Fidelity rollover process:
Step 1: Open a Fidelity Account
- Visit Fidelity’s website or call their customer service line to open a rollover IRA account.
Step 2: Gather Necessary Documents
- Your current 401(k) plan statement
- Your Social Security number
- Your mailing address and contact information
Step 3: Contact Your Current Plan Administrator
- Request a direct rollover form from your current plan administrator.
- Complete the form and indicate that you want to roll over your account to Fidelity.
Step 4: Submit Rollover Request to Fidelity
- Send the completed rollover form and any required documentation to Fidelity.
- Fidelity will initiate the transfer of funds.
Step 5: Track Your Rollover
- You can track the progress of your rollover online or by calling Fidelity customer service.
Tax Implications
- Distributions from a traditional 401(k) are taxed as ordinary income.
- Distributions from a Roth 401(k) are tax-free as long as certain requirements are met (e.g., qualified distributions).
Benefits of Rolling Over to Fidelity
- Wide range of investment options: Fidelity offers a diverse portfolio of mutual funds, ETFs, target-date funds, and more.
- Professional guidance: Access to investment professionals who can help you create a personalized retirement plan.
- Low fees: Competitive investment fees to maximize your returns.
- Convenience: Online account management, mobile app, and 24/7 customer service.
Table: Fidelity Rollover Options
| Rollover Type | Tax Treatment | Income Limits |
|---|---|---|
| Traditional IRA | Tax-deferred growth | N/A |
| Roth IRA | Tax-free withdrawals | Phase-out limits based on income |
| Rollover IRA | Combination of tax-deferred and tax-free withdrawals | N/A |
Eligibility and Requirements for Rolling Over a 401(k) to Fidelity
Rolling over a 401(k) to Fidelity is a common way to consolidate retirement savings and take advantage of Fidelity’s investment options. However, not everyone is eligible to roll over their 401(k), and there are certain requirements that must be met.
Eligibility
- You must have a Fidelity account.
- The 401(k) plan you want to roll over must allow rollovers.
- You must be the primary beneficiary of the 401(k) plan.
- You must not have any outstanding loans on the 401(k) plan.
Requirements
- You must complete a rollover form.
- You must provide a statement from your previous 401(k) plan.
- You must make the rollover within 60 days of receiving the distribution from your previous 401(k) plan.
Table of Additional Requirements for Common 401(k) Plan Types
| 401(k) Plan Type | Additional Requirements |
|---|---|
| Traditional 401(k) | None |
| Roth 401(k) | You must be at least 59 1/2 years old or meet another exception |
| SIMPLE IRA | You must be at least 2 years of service |
| SEP IRA | You must be at least 2 years of self-employment |
Tax Implications of Rolling Over a 401(k) to Fidelity
When you roll over a 401(k) to Fidelity, you don’t have to pay taxes on the money as long as you roll it over to another tax-advantaged account. This can be a traditional or Roth IRA, or another employer-sponsored retirement plan. If you withdraw the money from the 401(k) instead of rolling it over, you’ll have to pay income tax on the withdrawal.
- Traditional 401(k) to Traditional IRA: Tax-deferred until withdrawal, no immediate tax consequences
- Traditional 401(k) to Roth IRA: Taxable in the year of the rollover, no taxes upon qualified withdrawals
- Roth 401(k) to Roth IRA: No tax consequences
- Roth 401(k) to Traditional IRA: Taxable in the year of the rollover, no taxes upon qualified withdrawals
If you’re not sure which type of IRA to roll your 401(k) over to, you can consult with a financial advisor.
Here’s a table summarizing the tax implications of rolling over a 401(k) to Fidelity:
From To Tax Implications Traditional 401(k) Traditional IRA Tax-deferred until withdrawal Traditional 401(k) Roth IRA Taxable in the year of the rollover Roth 401(k) Roth IRA No tax consequences Roth 401(k) Traditional IRA Taxable in the year of the rollover Benefits of Rolling Over to Fidelity
Rolling over your 401(k) to Fidelity offers several advantages:
- Wider Investment Options: Fidelity provides a vast array of investment options, including stocks, bonds, mutual funds, and ETFs, allowing you to diversify your portfolio more effectively.
- Lower Fees: Fidelity is known for its low fees, which can save you money in the long run. These fees include expense ratios on funds, account maintenance fees, and trading commissions.
- Excellent Customer Service: Fidelity has a reputation for exceptional customer service, with live phone support, online chat, and a network of local branches available to assist you with your financial needs.
- Wealth Management Services: For high-net-worth individuals, Fidelity offers comprehensive wealth management services, such as financial planning, portfolio management, and tax optimization.
- Retirement Planning Tools: Fidelity provides a range of retirement planning tools, calculators, and resources to help you prepare for a financially secure retirement.
To summarize these benefits in a tabular format:
Feature Fidelity Investment Options Vast selection including stocks, bonds, mutual funds, ETFs Fees Low expense ratios, account maintenance fees, and trading commissions Customer Service Live phone support, online chat, local branches Wealth Management Services Available for high-net-worth individuals Retirement Planning Tools Calculators, resources, and guidance Thanks for checking out our article on rolling over your 401k to Fidelity! We hope this information has been helpful in making your decision. Remember, every situation is different, so be sure to consult with a financial advisor to ensure the rollover is the best move for you. In the meantime, be sure to stop by again for more informative articles on all things finance. We’ll see you next time!