If you need to alter the details of your Fidelity 401k, you must first get the relevant forms from your plan or Fidelity. Once you have the forms, fill them out in their entirety and be sure to sign and date them. You may be able to make changes to your account online or by phone. However, for certain changes, you may need to submit the completed forms by mail. After you submit the forms, Fidelity will process your request and notify you when the changes have been made. The processing time may vary depending on the nature of your request. Once you submit the forms, you can track the status of your request online or by calling the Fidelity customer service number.
Understanding 401(k) Rollover Options
If you’re looking to make changes to your Fidelity 401(k) investments, it’s important to understand your options for rolling over your funds. A rollover allows you to move your retirement savings from one account to another.
There are two main types of 401(k) rollovers: direct rollovers and indirect rollovers.
- Direct rollovers are the simplest and most common type of rollover. In a direct rollover, the money is transferred directly from your old 401(k) account to your new 401(k) account.
- Indirect rollovers are a bit more complex. In an indirect rollover, you receive a distribution from your old 401(k) account, and then you have 60 days to redeposit the money into your new 401(k) account.
There are some important things to keep in mind if you’re considering a 401(k) rollover.
- Taxes: If you take an indirect rollover, you will have to pay taxes on the money that you receive from your old 401(k) account. However, if you redeposit the money into your new 401(k) account within 60 days, you will not have to pay taxes on the money.
- Fees: Some retirement plans may charge a fee for rollovers. It’s important to check with your old and new retirement plan providers to see if there are any fees associated with a rollover.
- Timing: It’s important to start the rollover process as soon as possible. This will give you plenty of time to complete the process and avoid any potential problems.
| Rollover Type | How it Works | Tax Implications |
|---|---|---|
| Direct Rollover | Money is transferred directly from old to new 401(k) account. | No taxes or penalties |
| Indirect Rollover | You receive a distribution from your old 401(k) account and have 60 days to redeposit it into a new 401(k) account. | Taxes and penalties apply if not redeposited within 60 days |
Steps to Change Fidelity 401(k) Investments
Changing your Fidelity 401(k) investments is crucial for aligning your portfolio with your financial goals and risk tolerance. Here are the steps to guide you:
- Log in: Access your Fidelity 401(k) account online.
- Select “Investments” tab: This will display your current investment options.
- Choose “Make changes” button: This will open a list of available funds.
- Adjust allocation: Enter the desired percentages for each fund or use the “Predefined Diversification” options.
- Review and submit: Double-check your selections and click “Submit” to execute the changes.
Avoid 401(k) Investment Mistakes
To ensure informed decision-making, it’s important to avoid common pitfalls:
- Overtrading: Avoid making frequent changes in response to market fluctuations.
- Chasing returns: Don’t invest solely based on past performance.
- Investing too conservatively: Consider your age, risk tolerance, and investment horizon.
- Neglecting diversification: Spread your investments across multiple asset classes and fund types.
Estimated Timeline for Changes
| Investment Type | Estimated Processing Time |
|---|---|
| Mutual funds | 1-2 business days |
| Target-date funds | 1 business day |
| Exchange-traded funds (ETFs) | 2-3 business days |
Remember to periodically review and adjust your investments to stay aligned with your evolving goals and circumstances.
Factors to Consider Before Changing Your 401(k)
Changing your 401(k) investments is an important decision that should be made carefully. Here are some factors to consider before making any changes:
- Your investment goals: What are you trying to achieve with your 401(k) investments? Are you saving for retirement, a down payment on a house, or something else?
- Your risk tolerance: How comfortable are you with losing money in your investments? If you’re not comfortable with risk, you should consider investing in more conservative options.
- Your time horizon: How long do you plan to invest for? If you’re planning to retire in the next few years, you should focus on more conservative investments. If you have a longer time horizon, you can afford to take on more risk.
- Your current investments: If you’re already invested in 401(k) funds, it’s important to assess their performance and make sure they’re aligned with your goals.
Steps to Change Your Fidelity Investments
- Log in to your Fidelity account.
- Click on the “Investments” tab.
- Select the 401(k) account you want to change.
- Click on the “Change Investments” link.
- Select the new investments you want to make.
- Click on the “Submit” button.
Making Informed Changes
Here are some additional tips for making informed changes to your 401(k) investments:
- Do your research: Learn about the different investment options available to you and make sure you understand the risks involved.
- Talk to a financial advisor: If you’re not sure how to change your investments, you can talk to a financial advisor.
- Make changes gradually: Don’t make drastic changes to your investments all at once. Start by making small changes and then gradually increase the amount of risk you’re taking.
- Monitor your investments: Once you’ve made changes to your investments, it’s important to monitor their performance and make adjustments as needed.
Tax Implications of a 401(k) Change
When you make changes to your 401(k) investments, it’s important to be aware of the potential tax implications. Here’s what you need to know.
- Tax-Deferred Investments: 401(k) contributions are typically made on a pre-tax basis, which means they are deducted from your paycheck before taxes are taken out. This reduces your current taxable income, but it also means that you will owe taxes on the money when you withdraw it in retirement.
- Roth Investments: Roth 401(k) contributions are made on an after-tax basis. This means that you do not get a tax deduction for the contributions, but you will not owe taxes on the money when you withdraw it in retirement.
- Investment Gains and Losses: If you sell investments in your 401(k) for a profit, you will owe capital gains taxes on the profit. Similarly, if you sell investments for a loss, you may be able to claim a capital loss deduction on your taxes.
It’s important to speak with a tax professional to understand how your specific 401(k) changes may affect your tax liability.
Type of Change Tax Implications Changing investment mix No immediate tax implications, but may affect future gains or losses Selling investments for a profit Capital gains taxes owed on the profit Selling investments for a loss Capital loss deduction may be available Withdrawing funds before age 59½ Early withdrawal penalties and income taxes apply Rolling over funds to another 401(k) or IRA Tax-free if done properly Well there you have it, folks! Now you know how to take control of your Fidelity 401k investments like a pro. Remember to check in regularly and make adjustments as needed to keep your retirement savings on track. Thanks for stopping by, and keep an eye out for more financial wisdom in the future. Till next time, keep investing and conquering your financial goals!