Embarking on the journey of transferring your Voya 401(k) to Fidelity can feel like a daunting task, but I assure you, with a proper step-by-step guide, it's entirely manageable. Think of this as a strategic move to centralize your retirement savings, potentially offering more control, lower fees, and a wider array of investment options. Ready to take charge of your financial future? Let's dive in!
Understanding the "Why" Before the "How"
Before we get into the nitty-gritty, let's briefly touch upon why individuals choose to roll over their 401(k)s:
Consolidation: Having multiple old 401(k)s from previous employers can be cumbersome to track. Rolling them into one account, like a Fidelity IRA, simplifies your financial picture.
Investment Options: Employer-sponsored 401(k)s often have a limited selection of investment choices. An IRA at Fidelity typically offers a much broader universe of stocks, bonds, mutual funds, ETFs, and more, allowing for greater customization of your portfolio.
Fees: Sometimes, older 401(k) plans can have higher administrative or investment-related fees compared to what you might find at a brokerage like Fidelity.
Control and Flexibility: An IRA gives you more direct control over your investments and distributions, especially as you approach retirement.
Now, let's get to the practical steps!
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| How To Transfer Voya 401k To Fidelity |
Step 1: Assess Your Voya 401(k) and Determine Your Rollover Strategy
This is where you, the user, actively engage with your current retirement situation. Grab a recent Voya 401(k) statement – it will be incredibly helpful!
QuickTip: Slow scrolling helps comprehension.
1.1 Gather Voya Account Information:
Locate your Voya 401(k) account number.
Determine if your 401(k) is a Traditional 401(k) (pre-tax contributions) or a Roth 401(k) (after-tax contributions). This is crucial for choosing the correct Fidelity account type to avoid tax implications.
Note down your vested balance. While generally, you're fully vested in your own contributions, employer contributions might have a vesting schedule. Most rollovers are only for vested amounts.
Confirm your mailing address with Voya. They will likely send a check as part of the rollover process.
1.2 Understand Rollover Types: Direct vs. Indirect
Direct Rollover (Highly Recommended): This is the preferred method and minimizes tax complexities. With a direct rollover, Voya sends the funds directly to Fidelity. You never physically receive the money. This ensures no tax withholding and no risk of missing the 60-day deadline.
Indirect Rollover (Use with Caution): In an indirect rollover, Voya sends you a check made out to you. You then have 60 days from the date you receive the funds to deposit the entire amount into your new Fidelity account. If you miss this deadline, the distribution becomes taxable income and may be subject to a 10% early withdrawal penalty if you're under 59½. Furthermore, Voya will typically withhold 20% of the amount for federal income tax, even if you intend to roll over the full amount. You'd have to make up this 20% from other funds to roll over the total original amount to avoid taxes and penalties. Unless there's a compelling reason, always aim for a direct rollover.
1.3 Consider Any Outstanding Loans:
If you have an outstanding loan against your Voya 401(k), it's vital to address this before initiating the rollover. Unpaid loan balances upon rollover can be treated as a taxable distribution. Contact Voya to understand their policy on loans during a rollover.
Step 2: Open Your Fidelity Account (If You Don't Have One)
This is where you set up the receiving home for your Voya funds. Fidelity offers a variety of IRA options, and selecting the right one is key to maintaining the tax-advantaged status of your retirement savings.
2.1 Choose the Right Fidelity Account Type:
If you have a Traditional Voya 401(k): Open a Fidelity Rollover IRA or a Traditional IRA. This allows your pre-tax money to continue growing tax-deferred.
If you have a Roth Voya 401(k): Open a Fidelity Roth IRA. This ensures your after-tax contributions and qualified earnings remain tax-free in retirement.
If you have both Traditional and Roth 401(k) balances in Voya: You'll likely need to open both a Fidelity Traditional IRA and a Fidelity Roth IRA to receive the respective portions of your rollover.
Consider a new employer's Fidelity 401(k): If your new employer offers a 401(k) plan administered by Fidelity and allows "roll-ins," you might choose to consolidate your old Voya 401(k) directly into your new employer's Fidelity 401(k). This is often simpler if you prefer to keep all your workplace retirement savings in one plan.
2.2 Initiate Account Opening:
Visit the Fidelity website (Fidelity.com) or call their customer service. They have dedicated rollover specialists who can guide you through the process.
Be prepared to provide personal information such as your Social Security Number, date of birth, and contact details.
If you're opening a new IRA, you'll also need to link a bank account for future contributions or withdrawals, though it's not immediately needed for the rollover.
Step 3: Initiate the Rollover Request with Fidelity
Fidelity often takes the lead in this step, simplifying the process for you. This is known as a "custodian-to-custodian" transfer or direct rollover.
3.1 Contact Fidelity's Rollover Team:
The easiest way is to call Fidelity's customer service or utilize their online rollover tools on NetBenefits.com (if your new employer's plan is with Fidelity) or Fidelity.com for individual accounts.
Inform them you want to roll over your Voya 401(k) into your new Fidelity account.
They will likely provide you with a Transfer/Rollover/Exchange Form or guide you through an online equivalent.
3.2 Provide Voya Account Details to Fidelity:
Fidelity will need specific information about your Voya 401(k) to initiate the transfer. This includes:
Your Voya 401(k) account number.
The name of your previous employer that sponsored the Voya plan.
The exact type of 401(k) (Traditional or Roth).
The amount or percentage you wish to roll over (typically 100% of the vested balance).
3.3 Fidelity Contacts Voya:
Once you've provided the necessary information, Fidelity will often handle the communication with Voya on your behalf. They will send a "Letter of Acceptance" (LOA) to Voya, indicating their readiness to receive the funds.
This direct communication between the two financial institutions helps ensure a smooth, direct rollover and reduces the chance of errors or delays.
QuickTip: Repetition reinforces learning.
Step 4: Coordinate with Voya (If Necessary) and Await Fund Transfer
While Fidelity often handles most of the legwork, sometimes Voya might require direct action from you.
4.1 Voya's Requirements:
Voya might have its own specific forms or requirements for initiating a rollover out of their plan. Be prepared to fill out any additional paperwork Voya sends you.
Important: If Voya insists on sending a check directly to you (an indirect rollover), reiterate your preference for a direct rollover to Fidelity. If they still send it to you, remember the 60-day rule and the 20% mandatory tax withholding.
Some plans may require a Medallion Signature Guarantee or spousal consent, so be aware of any such stipulations.
4.2 The Check is in the Mail (or Wire Transfer):
In a direct rollover, Voya will typically issue a check made payable to "Fidelity Management Trust Company FBO [Your Name]" or directly wire the funds to Fidelity.
If you receive the check, do NOT cash it! Immediately mail it to Fidelity, ensuring your Fidelity account number is clearly written on the check. Fidelity will provide you with the correct mailing address.
4.3 Track the Transfer:
Keep an eye on both your Voya and Fidelity accounts.
Voya will show the funds being disbursed, and Fidelity will show the funds being deposited.
Transfers can take anywhere from 1-4 weeks to complete, depending on the institutions involved and how the transfer is initiated (check vs. wire).
Step 5: Invest Your Rolled-Over Funds at Fidelity
Congratulations! Your funds have arrived at Fidelity. Now it's time to put them to work for your retirement.
5.1 Review Your Investment Options:
Once the funds are in your Fidelity IRA, they will typically sit in a "cash" or "money market" settlement fund. They are not yet invested in the market.
Explore Fidelity's extensive range of investment products:
Mutual Funds: Including Fidelity's own highly-regarded funds and funds from other providers.
ETFs (Exchange-Traded Funds): A diverse and often low-cost way to invest.
Individual Stocks and Bonds: For those who prefer to build their own portfolio.
Target Date Funds: A convenient "set it and forget it" option that automatically adjusts its asset allocation as you approach retirement.
Consider your risk tolerance, time horizon, and retirement goals when making investment decisions.
5.2 Allocate Your Investments:
You can manage your investments yourself through Fidelity's online platform, or you can opt for managed solutions like Fidelity Go® (a robo-advisor service) or work with a Fidelity financial advisor for personalized guidance.
Don't let your money sit uninvested for too long! The power of compounding growth is key to long-term retirement savings.
Step 6: Confirm and Keep Records
QuickTip: Reread for hidden meaning.
A little administrative tidiness goes a long way in managing your finances.
6.1 Verify the Rollover:
Once the funds are invested, double-check your Fidelity account statement to ensure the full amount was transferred and invested as you intended.
Ensure the tax basis information (especially for Roth funds) has been correctly transferred from Voya to Fidelity.
6.2 Keep Important Documents:
Retain copies of all correspondence, forms, and statements related to the rollover from both Voya and Fidelity. This includes any 1099-R forms you might receive (especially if there was any indirect rollover component). This will be useful for tax purposes and your personal records.
Frequently Asked Questions (FAQs)
Here are 10 related FAQ questions with quick answers to help you navigate your 401(k) rollover:
1. How to start the Voya 401(k) to Fidelity rollover process? Quick Answer: Begin by contacting Fidelity's rollover specialists or opening a new Fidelity IRA online, and they will help initiate the transfer request with Voya.
2. How to avoid taxes and penalties when rolling over a 401(k)? Quick Answer: Always opt for a direct rollover, where funds are transferred directly from Voya to Fidelity, avoiding you ever taking possession of the money.
3. How to choose between a Traditional IRA and a Roth IRA for my rollover? Quick Answer: If your Voya 401(k) was pre-tax, choose a Traditional IRA. If it was a Roth 401(k) (after-tax), choose a Roth IRA to maintain tax-free growth and withdrawals.
QuickTip: Slow down if the pace feels too fast.
4. How to find my Voya 401(k) account number and details? Quick Answer: Check a recent Voya 401(k) statement, or contact Voya's customer service directly if you cannot locate your statements.
5. How long does it take to transfer a Voya 401(k) to Fidelity? Quick Answer: Typically, a direct rollover can take anywhere from 1 to 4 weeks, depending on the efficiency of both Voya and Fidelity in processing the request.
6. How to handle an outstanding loan on my Voya 401(k) before rolling over? Quick Answer: You must typically repay the loan in full before initiating the rollover, or the outstanding balance may be treated as a taxable distribution. Contact Voya for their specific policy.
7. How to invest my money once it's in my Fidelity IRA? Quick Answer: Once the funds settle in your Fidelity IRA's cash account, log in to your Fidelity account and choose from their wide range of investment options, such as mutual funds, ETFs, stocks, or managed solutions.
8. How to get help if I encounter issues during the rollover? Quick Answer: Both Fidelity and Voya have dedicated customer service teams for retirement plans and rollovers. Don't hesitate to call them for assistance. Fidelity's rollover specialists are particularly helpful.
9. How to report a 401(k) rollover on my taxes? Quick Answer: For a direct rollover, you'll typically receive a 1099-R from Voya, but it should indicate a direct rollover, meaning it's generally not a taxable event. Keep all documentation for your tax records. Consult a tax professional for specific advice.
10. How to decide if rolling over my 401(k) is the right choice for me? Quick Answer: Consider factors like investment options, fees, ease of management, and your future financial goals. While often beneficial, it's wise to consult with a financial advisor to ensure it aligns with your overall financial plan.
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