Navigating retirement savings can feel like a labyrinth, especially when you're looking to consolidate accounts for better management or investment opportunities. If you've got a retirement account with TIAA and are considering rolling it over to Fidelity, you're in the right place! This comprehensive guide will walk you through every step of the process, ensuring a smooth and stress-free transition.
Your Journey to a Consolidated Retirement: Rolling Over from TIAA to Fidelity
Before we dive into the nitty-gritty, let's address the big question: Are you ready to take control of your retirement savings? If the answer is a resounding YES, then let's begin this journey together. Rolling over your retirement funds from TIAA to Fidelity can offer several benefits, including potentially broader investment options, simplified account management, and potentially lower fees depending on your specific TIAA contract and Fidelity's offerings.
Understanding Your TIAA Account Before the Rollover
Before you initiate any transfer, it's crucial to understand the specifics of your TIAA account(s). TIAA offers various types of contracts, and the rules for withdrawal or transfer can differ.
TIAA Traditional Annuity: This account type often has specific payout options and may involve waiting periods or surrender charges for lump-sum withdrawals, especially if you haven't reached a "triggering event" like separation from service or age 59½. Some contracts may require payments over time (e.g., 10 annual installments or 84 monthly installments).
Other TIAA Retirement Accounts (e.g., 401(k), 403(b), 457(b)): These workplace plans generally have more straightforward rollover options once you've separated from service.
Pro-Tip: Review your most recent TIAA statements and contact TIAA directly to confirm the exact nature of your account(s) and any specific rules, fees, or limitations that might apply to a rollover. Their contact number for rollovers is generally 800-842-2252.
Step 1: Define Your Fidelity Rollover Destination
Your first concrete action is to determine where your TIAA funds will land at Fidelity. This typically means opening a new Fidelity IRA (Individual Retirement Account).
Sub-heading: Choosing the Right IRA Type
Fidelity offers several IRA types, and the best choice for you depends on your tax situation and retirement goals:
Rollover IRA (Traditional IRA): This is the most common choice for rolling over pre-tax funds from a 401(k), 403(b), or similar workplace plan. The funds continue to grow tax-deferred, and distributions in retirement will be taxed as ordinary income.
Roth IRA: If you have after-tax contributions in your TIAA account (e.g., Roth 401(k) contributions) or if you want to pay taxes now and have tax-free withdrawals in retirement, a Roth IRA might be suitable. Be aware that rolling pre-tax funds into a Roth IRA will trigger an immediate tax liability on the converted amount.
SEP IRA/SIMPLE IRA: These are for self-employed individuals or small business owners. Less common for a standard rollover from an old employer's plan.
Consider your current and future tax brackets when making this decision. If you're unsure, consulting a tax advisor is highly recommended.
Sub-heading: Opening Your Fidelity IRA Account
You can open a Fidelity IRA online, which is usually a quick and straightforward process.
Visit the Fidelity Website: Navigate to the Fidelity website (
www.fidelity.com Select "Open an Account": Look for options like "Open an Account" or "IRAs."
Choose Your IRA Type: Select the type of IRA you determined in the previous step (e.g., "Rollover IRA").
Provide Personal Information: You'll need to provide your personal details, including your Social Security number, date of birth, and contact information.
Funding Your Account (Optional for now): While the purpose is to roll over funds, you might be asked about initial funding. You can indicate that you plan to fund it via a rollover.
Review and Submit: Carefully review all the information before submitting your application.
Once your Fidelity IRA is open, you'll receive an account number. Keep this handy, as you'll need it for the next steps.
Step 2: Initiating the Rollover from TIAA
This is where you directly engage with TIAA to get your funds moving. There are two primary methods for rolling over funds: Direct Rollover and Indirect Rollover. For most people, a direct rollover is the preferred and safest option.
Sub-heading: Direct Rollover (Highly Recommended)
In a direct rollover, the funds are transferred directly from TIAA to Fidelity without passing through your hands. This method avoids potential tax withholding and penalties.
Contact TIAA: Reach out to TIAA's customer service, specifically their rollover department. You can usually find their contact information on your statements or their website. Their general number is 800-842-2252.
State Your Intent: Clearly inform TIAA that you wish to perform a direct rollover of your retirement funds to a Fidelity IRA. Be specific about the account(s) you want to roll over.
Provide Fidelity Account Details: TIAA will require the exact name of your Fidelity account (e.g., Fidelity Management Trust Company FBO [Your Name]) and your Fidelity IRA account number.
Complete TIAA's Rollover Forms: TIAA will likely provide you with specific forms to complete. These forms authorize the release and direct transfer of your funds.
Pay close attention to all fields, especially those related to tax withholding. Ensure you elect for a direct rollover to avoid any mandatory 20% federal tax withholding.
If you have a TIAA Traditional Annuity, understand any specific terms or surrender charges that might apply.
Fidelity Letter of Acceptance (LOA) - Potentially Required: Some providers, including TIAA, may request a "Letter of Acceptance" (LOA) from Fidelity. This document confirms that Fidelity is ready to receive the funds. You can typically generate an LOA through your Fidelity account online or by calling Fidelity's rollover support at 800-343-3548.
Submit Required Documents to TIAA: Send the completed TIAA rollover forms and any requested Fidelity LOA to TIAA as per their instructions (mail, fax, or secure upload).
Sub-heading: Indirect Rollover (Use with Caution)
In an indirect rollover, TIAA sends the funds to you (or a check payable to you). You then have 60 days from the date you receive the funds to deposit the entire original amount into your Fidelity IRA.
Potential Pitfalls: If you fail to deposit the full amount within 60 days, the IRS will consider the distribution a taxable withdrawal, subject to your ordinary income tax rate and potentially a 10% early withdrawal penalty if you're under 59½.
Mandatory 20% Withholding: TIAA is generally required to withhold 20% for federal income tax if they send the check directly to you. This means you'll need to make up that 20% from other sources when you deposit the funds into your Fidelity IRA to avoid tax consequences on that portion. You'd then recover the withheld amount when you file your taxes.
Due to these risks, the direct rollover is almost always the better option.
Step 3: Following Up and Confirming the Transfer
Once you've submitted your rollover request to TIAA, it's time for some diligent follow-up.
Sub-heading: Tracking the Progress with TIAA
Note Reference Numbers: When you speak with TIAA or submit forms, always get and keep a reference number for your request.
Check TIAA Account Status: Monitor your TIAA account online or by calling them periodically to see if the funds have been disbursed.
Confirm Disbursement: Ask TIAA for confirmation that the funds have been sent to Fidelity and inquire about the method (e.g., electronic transfer or check) and the expected timeline. TIAA will typically send a check directly to Fidelity for direct rollovers.
Sub-heading: Verifying Receipt at Fidelity
Monitor Your Fidelity Account: Once TIAA confirms the disbursement, keep an eye on your new Fidelity IRA account. It can take a few business days for electronic transfers or longer for mailed checks to clear and appear in your account.
Confirm Funds Allocation: Once the funds arrive, confirm that they have been deposited into the correct IRA type (e.g., Traditional Rollover IRA or Roth IRA).
The entire process, from initiating the request with TIAA to seeing the funds settled in your Fidelity account, can take anywhere from 2 to 6 weeks, depending on the institutions' processing times and the method of transfer.
Step 4: Investing Your Rolled-Over Funds at Fidelity
Simply having the funds in your Fidelity IRA isn't enough; you need to invest them to truly benefit from tax-deferred (or tax-free) growth.
Sub-heading: Exploring Fidelity's Investment Options
Fidelity offers a vast array of investment choices, far exceeding what's typically available in employer-sponsored plans like TIAA.
Mutual Funds: Fidelity boasts a wide selection of their own mutual funds (many with no transaction fees) as well as thousands of funds from other companies.
Exchange-Traded Funds (ETFs): Similar to mutual funds but trade like stocks, offering diversification and often lower expense ratios.
Stocks and Bonds: If you prefer to build your own portfolio, you have access to individual stocks and bonds.
Target Date Funds: These are "set it and forget it" funds that automatically adjust their asset allocation as you approach your target retirement date.
Managed Accounts (Fidelity Go® or Fidelity Wealth Services): If you prefer professional management, Fidelity offers services where they manage your investments for you for an advisory fee.
Sub-heading: Developing Your Investment Strategy
Assess Your Risk Tolerance: How comfortable are you with market fluctuations? This will help determine your asset allocation.
Define Your Goals: Are you saving for retirement, a down payment, or something else?
Diversify Your Portfolio: Don't put all your eggs in one basket. Spread your investments across different asset classes (stocks, bonds, real estate, etc.) and sectors.
Utilize Fidelity's Tools and Resources: Fidelity provides numerous online tools, research reports, and educational materials to help you make informed investment decisions. You can also schedule a meeting with a Fidelity financial consultant for personalized advice.
Don't let your rolled-over funds sit in cash! The power of compounding growth is immense, and every day your money isn't invested is a missed opportunity.
Step 5: Reviewing Fees and Tax Implications
While a direct rollover is generally tax-free, it's essential to be aware of potential fees and any lingering tax considerations.
Sub-heading: Understanding Potential Fees
TIAA Fees: TIAA generally does not charge fees for processing rollovers, but there might be a surrender charge on certain TIAA Traditional Annuity contracts if you withdraw before a certain event or period, especially within 120 days of termination (a 2.5% surrender charge might apply unless the balance is very small, e.g., $5,000 or less). Always confirm with TIAA.
Fidelity Fees: Fidelity's Traditional, Roth, SEP, and Rollover IRAs typically have no annual maintenance fees. However, investment products within your IRA may have their own expense ratios or transaction fees. There might also be a small account closure fee (e.g., $50) if you decide to close the Fidelity IRA in the future.
Investment-Specific Fees: Be mindful of expense ratios for mutual funds and ETFs, and any trading commissions if you're actively buying and selling individual stocks.
Sub-heading: Navigating Tax Implications
Direct Rollover: As mentioned, a direct rollover generally has no immediate tax consequences. The pre-tax funds remain tax-deferred.
Roth Conversions: If you decide to convert pre-tax funds to a Roth IRA, you will pay income taxes on the converted amount in the year of the conversion. This is a strategic move to consider if you anticipate being in a higher tax bracket in retirement.
After-Tax Contributions: If your TIAA plan included after-tax contributions (which are rare in TIAA 401ks/403bs but can exist), ensure these are properly tracked and rolled over to a Roth IRA to maintain their tax-free status in retirement. Fidelity can guide you on this.
Required Minimum Distributions (RMDs): If you are age 73 or older, you must take your RMD for the year from your TIAA account before rolling over the remaining funds. Failing to do so can result in significant penalties. TIAA will generally calculate and distribute your RMD if you are subject to it and haven't taken it.
It's always a good idea to consult with a qualified tax advisor to discuss your specific situation, especially if you have complex tax circumstances or are considering a Roth conversion.
Step 6: Final Verification and Ongoing Management
The rollover is complete, your funds are invested, but your job isn't entirely done.
Sub-heading: Confirming Everything is in Order
Review Statements: Carefully review the first few statements from Fidelity to ensure the rolled-over funds are accurately reflected and invested as you intended.
Check for Residual Accounts: Confirm with TIAA that your old account is closed or has a zero balance, as appropriate.
Sub-heading: Long-Term Management
Regular Portfolio Reviews: Periodically review your Fidelity IRA portfolio to ensure it aligns with your financial goals and risk tolerance. Rebalance as needed.
Stay Informed: Keep abreast of market conditions and any changes to Fidelity's offerings or fees.
Update Beneficiaries: Ensure your beneficiaries are up-to-date on your new Fidelity IRA. This is crucial for smooth asset transfer upon your passing.
This step-by-step guide provides a detailed roadmap for rolling over your TIAA retirement account to Fidelity. While the process involves a few stages, breaking it down and taking each step methodically will ensure a successful and beneficial transition for your retirement savings.
Frequently Asked Questions (FAQs)
Here are 10 common "How to" questions related to rolling over from TIAA to Fidelity, with quick answers:
How to start a TIAA to Fidelity rollover?
To start, first open a Rollover IRA (or suitable IRA type) with Fidelity, then contact TIAA to initiate a direct rollover of your funds to your new Fidelity account.
How to find my TIAA account number for rollover?
Your TIAA account number can typically be found on your TIAA statements or by logging into your TIAA online account. If you cannot find it, contact TIAA customer service directly.
How to choose between a direct and indirect rollover from TIAA?
Always choose a direct rollover if possible. It's simpler, avoids mandatory tax withholding, and eliminates the 60-day deadline and potential penalties associated with an indirect rollover.
How to get a Letter of Acceptance (LOA) from Fidelity for TIAA?
You can usually generate an LOA through your Fidelity online account or by calling Fidelity's rollover support team (800-343-3548).
How to avoid taxes when rolling over from TIAA to Fidelity?
Perform a direct rollover of pre-tax funds into a Traditional Rollover IRA at Fidelity. This preserves the tax-deferred status of your funds.
How to handle TIAA Traditional Annuity funds during a rollover?
The TIAA Traditional Annuity may have specific withdrawal rules, including potential surrender charges or required installment payments depending on your contract and employment status. Contact TIAA to understand the exact terms before initiating the rollover.
How to invest my money after rolling it over to Fidelity?
Once funds arrive at Fidelity, you'll need to actively choose investments. Fidelity offers a wide range of options, including mutual funds, ETFs, stocks, and managed accounts. Consider your risk tolerance and financial goals.
How to check the status of my TIAA to Fidelity rollover?
You can check the status by logging into your TIAA account or calling their customer service, and then by monitoring your new Fidelity account for the receipt of funds.
How to transfer Roth 401(k) funds from TIAA to Fidelity?
Roth 401(k) contributions from TIAA should be rolled over directly into a Roth IRA at Fidelity to maintain their tax-free growth and withdrawal benefits.
How to contact Fidelity for rollover assistance?
You can contact Fidelity's rollover support team at 800-343-3548 for assistance with opening accounts, generating LOAs, and tracking your rollover.
