How to Close Fidelity 401k Account

To close your Fidelity 401k account, first make sure to review your account options and consider whether any other options, such as a rollover to another account, would be more beneficial. Contact Fidelity’s retirement customer service department and request an account closure form. Complete the form by providing your personal information, account details, and signature. Once submitted, the process to close your account will begin. Keep in mind that any remaining balance in your account will be distributed according to your beneficiaries or estate.

Initiating the Closure Process

Terminating your Fidelity 401k account entails a straightforward process that can be initiated through the following steps:

1. Contact Fidelity:
• Call their customer service line at 1-800-343-3543.
• Visit a local Fidelity office.
2. Request Closure:
• Inform the Fidelity representative of your intention to close the account.
• Provide necessary personal and account information.
3. Receive Instructions:
• Fidelity will provide instructions on how to proceed with the closure.
• You will receive a closure confirmation once the process is complete.

Withdrawing or Rolling Over Funds

Once you have decided to close your Fidelity 401k account, you will need to choose what to do with the funds. You have two main options:

• Withdraw the funds: This will give you access to the money immediately, but you will have to pay taxes and penalties on the withdrawal.
• Roll over the funds: This will allow you to transfer the money to another retirement account, such as an IRA, without paying taxes or penalties.

If you choose to withdraw the funds, you will need to complete a withdrawal form and submit it to Fidelity. You will then receive a check for the amount of the withdrawal.

If you choose to roll over the funds, you will need to complete a rollover form and provide the name and address of the new retirement account. Fidelity will then transfer the funds to the new account.

Option	Taxes and Penalties	Access to Funds
Withdraw Funds	Yes	Immediate
Roll Over Funds	No	After transfer to new account

Tax Implications of Account Closure

Closing your Fidelity 401(k) account may have tax implications, depending on the type of account and how you withdraw the funds. Here’s an overview:

• Traditional 401(k)s: Withdrawals from traditional 401(k)s are taxed as regular income in the year they are taken. Additionally, if you withdraw funds before age 59½, you may be subject to a 10% early withdrawal penalty.
• Roth 401(k)s: Qualified withdrawals from Roth 401(k)s are tax-free. However, if you withdraw earnings before age 59½, you may be subject to a 10% early withdrawal penalty.

Before closing your 401(k) account, consider the following options to avoid or minimize tax implications:

1. Rollover to a Traditional IRA or Roth IRA: You can roll over your 401(k) funds into a traditional or Roth IRA without paying taxes or penalties. This allows you to continue growing your retirement savings in a tax-advantaged account.
2. Leave the Funds in the Plan: If you are still employed by the company sponsoring your 401(k), you may be able to leave your funds in the plan until you retire or terminate employment.

**Table: Tax Implications of 401(k) Withdrawals**

| Withdrawal Type | Tax Implications |
|—|—|
| Traditional 401(k) withdrawal | Taxed as regular income |
| Traditional 401(k) withdrawal before age 59½ | 10% early withdrawal penalty |
| Roth 401(k) withdrawal | Tax-free (if qualified) |
| Roth 401(k) withdrawal before age 59½ | 10% early withdrawal penalty |

Alternative Options for Account Retirement

When you leave a job with a 401(k) plan through Fidelity, you have several options for your account:

• Leave the account with Fidelity: You can keep your account open even if you’re no longer employed by the company that sponsored the plan.
• Roll over to a new 401(k) plan: If your new employer offers a 401(k) plan, you can roll over your Fidelity account into it. This allows you to continue saving for retirement on a tax-advantaged basis.
• Roll over to an IRA: You can also roll over your Fidelity 401(k) account into an individual retirement account (IRA). This gives you more investment options and control over your retirement savings.
• Cash out the account: You can cash out your Fidelity 401(k) account, but this is generally not recommended. You’ll pay income tax and a 10% early withdrawal penalty if you’re under age 59½.

The best option for you will depend on your individual circumstances and financial goals. If you need help deciding what to do with your Fidelity 401(k) account, consider speaking with a financial advisor.

Option	Pros	Cons
Leave the account with Fidelity	Easy to manage No fees for keeping the account open	May have limited investment options Fees for certain transactions
Roll over to a new 401(k) plan	Can continue saving for retirement on a tax-advantaged basis May have more investment options than your old plan	May not be able to roll over all of your assets May have to pay fees to roll over your account
Roll over to an IRA	More investment options More control over your retirement savings	May have to pay fees to roll over your account May have lower contribution limits than a 401(k) plan
Cash out the account	Immediate access to your money	Pay income tax and a 10% early withdrawal penalty if you’re under age 59½ Lose out on the potential tax savings of saving for retirement

Thanks for sticking with me through this guide! I hope it’s made closing your Fidelity 401(k) account a breeze. If you have any other questions or need further assistance, don’t hesitate to reach out to me. In the meantime, keep an eye out for more helpful articles and tips coming your way. Thanks for stopping by, and I’ll catch you later!