Have you recently left Amazon and are wondering what to do with your 401(k)? Or perhaps you're still with the company but need to understand your options for accessing these funds in the future. Whatever your situation, navigating the world of 401(k) withdrawals can feel like a complex maze, filled with acronyms, rules, and potential penalties. But don't worry, you're not alone, and this comprehensive guide is here to simplify the process for you.
Your 401(k) is a crucial part of your retirement savings, and understanding how to manage it is vital for your financial well-being. Let's break down how you can get your 401(k) from Amazon, step by step.
Navigating Your Amazon 401(k): A Step-by-Step Guide
The Amazon 401(k) plan is generally administered by Fidelity NetBenefits. This means your primary point of contact and online access will be through Fidelity.
Step 1: Establish or Locate Your Fidelity NetBenefits Account
Engage with us right now: Before we dive into the nitty-gritty, have you ever logged into your Fidelity NetBenefits account for your Amazon 401(k)? If not, this is your very first and most important step!
If you have an existing Fidelity NetBenefits account: You can typically use your same login credentials. Head over to the Fidelity NetBenefits website or open their mobile app.
If you're a first-time user: You'll need to go through a quick signup process on the Fidelity NetBenefits portal. This usually involves providing some basic identity details to verify your association with your Amazon 401(k).
Forgotten credentials? Don't fret! Fidelity's website has robust options for password recovery and username retrieval. Look for "Forgot Username" or "Forgot Password" links on the login page.
Step 2: Understand Your Vesting Schedule
Before you even think about withdrawing funds, it's absolutely critical to understand your vesting status.
What is Vesting? Vesting refers to the ownership you have over the money in your 401(k). While your own contributions are generally 100% vested immediately, employer contributions (like Amazon's matching funds) often have a vesting schedule.
Amazon's Vesting Schedule: For Amazon's 401(k) plan, you become fully vested in their matching contributions after completing three years of service, which is generally defined as 3,000 hours of employment.
If you leave Amazon before this 3-year/3,000-hour period, you will forfeit any matched contributions Amazon has made. You will, however, always keep your own contributions.
Step 3: Explore Your Options After Leaving Amazon
Once you've left Amazon, you generally have a few primary options for your 401(k). Each comes with its own set of implications regarding taxes, access, and investment control.
Sub-heading 3.1: Leave Your Money in the Amazon 401(k) Plan
Pros: This is often the simplest option if your balance is above a certain threshold (typically $5,000, but can vary). Your funds continue to grow tax-deferred. You don't have to make any immediate decisions.
Cons: You won't be able to make new contributions. Your investment options might be limited compared to an IRA, and you may have less direct control over the account. Some plans might charge fees for former employees. It's also easy to forget about old accounts, so ensure you keep your contact information updated with Fidelity.
Sub-heading 3.2: Roll Over to a New Employer's 401(k) Plan
Pros: Consolidates your retirement savings into one account if your new employer offers a 401(k) and accepts rollovers. Your funds continue to grow tax-deferred, and you maintain employer-sponsored plan benefits.
Cons: New plan might have different investment options, fees, or withdrawal rules. You'll need to check the eligibility requirements and rollover policies of your new employer's plan.
Sub-heading 3.3: Roll Over to an Individual Retirement Account (IRA)
Pros: This is a popular option that offers greater investment flexibility and often a wider array of investment choices than a typical employer-sponsored plan. You maintain tax-deferred growth (for traditional IRAs). It gives you more control over your retirement savings.
Cons: You are responsible for managing the investments yourself (or with a financial advisor).
Types of IRA Rollovers:
Direct Rollover: This is highly recommended. The funds are transferred directly from Fidelity to your new IRA custodian. This avoids any mandatory tax withholding and reduces the risk of penalties.
Indirect Rollover: You receive a check for your 401(k) balance. Your employer is required to withhold 20% for federal income tax. You then have 60 days to deposit the full amount (including the 20% withheld, which you'll need to make up from other funds) into your new IRA to avoid taxes and penalties. If you don't complete the rollover within 60 days, the entire amount will be treated as a taxable distribution and could be subject to early withdrawal penalties.
Sub-heading 3.4: Cash Out Your 401(k) (Generally Not Recommended)
Pros: Immediate access to funds.
Cons: This is generally the least advisable option unless you are facing a severe financial hardship and have explored all other avenues.
Taxes: The entire amount you withdraw (unless it's from a Roth 401(k) and meets qualified distribution rules) will be treated as ordinary income and added to your taxable income for the year. This can push you into a higher tax bracket.
Early Withdrawal Penalty: If you are under 59 ½ years old, you will likely incur an additional 10% early withdrawal penalty from the IRS, on top of your regular income taxes.
Loss of Future Growth: Cashing out means you lose the significant power of compound interest over decades, severely impacting your retirement savings.
Step 4: Initiating Your Withdrawal or Rollover
Once you've decided on your preferred option, it's time to take action.
Sub-heading 4.1: Accessing Your Fidelity NetBenefits Account
Log in to your Fidelity NetBenefits account.
Navigate to the section for your Amazon 401(k) plan. Look for options like "Withdrawals," "Rollovers," or "Manage My Account."
The Fidelity interface is typically user-friendly, guiding you through the available options based on your current employment status (active or former employee) and age.
Sub-heading 4.2: Contacting Fidelity Directly
If you encounter any difficulties online or prefer speaking to a representative, call Fidelity NetBenefits customer service.
For general Amazon 401(k) assistance, you can often reach them at 1-800-835-5095.
For rollovers specifically, you might use 1-800-343-0860 (available 8 am to midnight ET, Monday-Friday).
Be prepared to provide your personal details (name, Social Security number, previous Amazon employee ID if you remember it) to verify your identity.
Sub-heading 4.3: Completing the Necessary Forms
Whether online or with a representative, you will need to complete specific forms for a withdrawal or rollover.
For rollovers: Ensure you have the account information (account number, routing details, contact person) of your new 401(k) plan or IRA. For a direct rollover, Fidelity will handle the transfer directly with the new custodian.
For withdrawals: Be prepared for tax implications and potential penalties, as discussed in Step 3. Fidelity will typically withhold 20% for federal taxes, and you'll need to account for any additional state taxes or the 10% early withdrawal penalty when you file your income taxes.
Step 5: Tax Considerations and Planning
This is a critical, often overlooked, part of the process.
Consult a Tax Professional: Seriously, do it. A qualified tax advisor can help you understand the full tax implications of any withdrawal or rollover and help you navigate complex scenarios, especially if you're considering an early withdrawal.
Required Minimum Distributions (RMDs): Once you reach a certain age (currently 73, though this has changed recently and may change again), you are generally required to start taking distributions from your traditional 401(k) and IRA accounts. Be aware of these rules for future planning.
Exceptions to Early Withdrawal Penalties: While the 10% penalty is standard, the IRS does allow for certain exceptions, such as:
Rule of 55 (if you leave your job at age 55 or older, you can withdraw from that employer's 401(k) without the 10% penalty).
Hardship withdrawals (for specific financial needs like medical expenses, preventing foreclosure/eviction, or funeral expenses – these are still taxable).
Total and permanent disability.
Qualified domestic relations orders (QDROs).
Substantially equal periodic payments (SEPP).
Birth or adoption expenses (up to $5,000 per child).
Victims of domestic abuse (up to $10,000).
10 Related FAQ Questions
How to access my Amazon 401(k) online?
You can access your Amazon 401(k) account by logging into your Fidelity NetBenefits account. If you're a new user, you'll need to register first using your personal details.
How to roll over my Amazon 401(k) to an IRA?
Log in to Fidelity NetBenefits, navigate to the rollover section, and choose the option for a direct rollover to an IRA. You'll need the details of your new IRA account. Alternatively, call Fidelity's customer service for assistance with the process.
How to withdraw my Amazon 401(k) if I'm under 59 ½?
If you're under 59 ½, withdrawing your Amazon 401(k) will generally result in a 10% early withdrawal penalty in addition to regular income taxes, unless an IRS exception applies (like the Rule of 55 or a qualified hardship withdrawal). It's typically initiated through your Fidelity NetBenefits account.
How to find my Amazon 401(k) account number?
Your account number for your Amazon 401(k) is typically available on your Fidelity NetBenefits statements or within your online account dashboard after you log in.
How to contact Fidelity NetBenefits for Amazon 401(k) support?
You can contact Fidelity NetBenefits for Amazon 401(k) support by calling their general customer service line at 1-800-835-5095 or their rollover-specific line at 1-800-343-0860.
How to check my Amazon 401(k) vesting status?
You can check your vesting status by logging into your Fidelity NetBenefits account. The vesting schedule for Amazon's matching contributions is typically 3 years of service (3,000 hours).
How to avoid penalties when taking money from my Amazon 401(k)?
To avoid penalties, you can generally wait until age 59 ½, qualify for an IRS exception (like the Rule of 55 if you left Amazon at 55 or older), or opt for a direct rollover to another qualified retirement account like a new 401(k) or an IRA.
How to get a hardship withdrawal from my Amazon 401(k)?
You can apply for a hardship withdrawal through Fidelity NetBenefits. You will need to demonstrate an "immediate and heavy financial need" as defined by IRS rules, such as medical expenses, preventing eviction/foreclosure, or certain educational costs. These withdrawals are still taxable.
How to update my address for my Amazon 401(k) with Fidelity?
You can update your contact information, including your address, by logging into your Fidelity NetBenefits account online or by contacting their customer service directly.
How to understand the tax implications of my Amazon 401(k) withdrawal?
Any withdrawal from a traditional 401(k) is subject to ordinary income tax. If you are under 59 ½, a 10% early withdrawal penalty typically applies, unless an exception is met. It's highly recommended to consult with a tax professional to understand your specific tax situation.
