A comprehensive, step-by-step guide to rolling over your retirement funds from Fidelity to Vanguard.
Are you ready to take control of your retirement savings? The process of rolling over a retirement account, such as a 401(k) or IRA, from one financial institution to another can seem daunting. But don't worry, it's a very common and manageable process. If you have an account with Fidelity and want to consolidate your investments with Vanguard to take advantage of their low-cost index funds and ETFs, this detailed guide is for you.
Let's walk through the entire process together, step-by-step.
Step 1: Get Prepared and Ask Yourself Key Questions
Before you even touch a form, let's get organized. This is the most crucial step, so let's engage with it! Take a deep breath and grab your most recent Fidelity account statement. It's time to gather some information.
What kind of account are you rolling over?
A 401(k), 403(b), or another employer-sponsored plan? This is a rollover.
An existing IRA (Traditional, Roth, or SEP)? This is an account transfer.
The process is similar, but the terminology and some of the rules differ. This guide will focus primarily on the rollover from a 401(k) to a Vanguard IRA, which is the most common scenario.
What type of assets do you have?
Pre-tax (Traditional)? This is money you contributed before taxes were taken out.
Roth (after-tax)? This is money you contributed after taxes were taken out.
A mix of both?
This is a critical distinction. If you have pre-tax assets, you will need to open a Traditional or Rollover IRA at Vanguard. If you have Roth assets, you'll need a Roth IRA. If you have both, you'll need two separate accounts. Rolling over pre-tax money into a Roth IRA is a "Roth conversion," which is a taxable event and requires careful consideration.
Is your Fidelity account an old employer's 401(k) or your current employer's?
Tip: Don’t skip the details — they matter.
If it's from a former employer, you can almost always roll it over.
If it's from your current employer, you might need to meet certain criteria, such as being over a certain age or having left the company, to be eligible for a rollover. Check your plan's Summary Plan Description (SPD) or contact your HR department.
Remember: Having this information handy will make the rest of the process much smoother.
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| How To Rollover From Fidelity To Vanguard |
Step 2: Open Your New Vanguard Account
You need a destination for your funds. If you don't already have a Vanguard account, this is the time to open one.
Sub-heading: Choosing the Right Account Type
Based on your answers in Step 1, you will open one or more of the following:
Traditional IRA or Rollover IRA: This is the most common choice for rolling over pre-tax 401(k) assets. A Rollover IRA is a type of Traditional IRA specifically for this purpose, and it keeps your funds separate, which can be useful if you ever want to roll them into a new employer's plan in the future.
Roth IRA: If you are rolling over a Roth 401(k), this is the account for you.
Vanguard Brokerage Account: This is necessary if you want to invest in individual stocks, bonds, or ETFs. Most mutual funds also require a brokerage account.
You can open the account online through the Vanguard website. The process is generally straightforward and will ask for your personal information, such as your Social Security number and contact details.
Step 3: Initiate the Rollover from Vanguard's Side
QuickTip: Skip distractions — focus on the words.
This is a key piece of advice: always initiate the transfer from the receiving institution (Vanguard in this case). This is often called a direct rollover or trustee-to-trustee transfer and is the most secure and tax-efficient method. It ensures the money goes directly from Fidelity to Vanguard without passing through your hands, which avoids any tax withholding or the 60-day rollover rule.
Sub-heading: The Direct Rollover vs. Indirect Rollover
Direct Rollover (recommended): Fidelity sends the money directly to Vanguard. The check is made payable to "Vanguard FBO [Your Name]". This is a simple, tax-free transfer.
Indirect Rollover: Fidelity sends you a check made payable to you. You then have 60 days to deposit the entire amount into your new Vanguard IRA. If you fail to do so, the IRS will consider it a withdrawal, and you'll be subject to income tax and a 10% early withdrawal penalty if you're under 59½. Furthermore, Fidelity is required to withhold 20% of the funds for taxes, so you would need to come up with that 20% on your own to roll over the full amount. Avoid this method if at all possible.
To initiate the direct rollover, log in to your new Vanguard account and navigate to the "Transfer an account" or "Rollover" section. You will likely be asked to provide some information about your Fidelity account, such as:
The account number.
The type of account.
The name of the institution (Fidelity Investments).
The estimated value of the account.
You may also be able to upload a recent account statement to expedite the process. Vanguard will then take the lead in contacting Fidelity to request the funds.
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Step 4: Follow Up with Fidelity
Even though Vanguard will initiate the transfer, it's often a good idea to contact Fidelity yourself to confirm the request and see if they require any additional paperwork from your end.
Fidelity's 401(k) rollover phone number is typically 800-835-5095.
Have your account number and personal information ready.
Clearly state that you want to do a direct rollover to a Vanguard IRA.
Ask if they require any special forms or a "Letter of Acceptance" from Vanguard. Vanguard's online process can usually generate this for you.
Confirm the check will be made payable to "Vanguard FBO [Your Name]" and sent directly to Vanguard.
Be patient: This step can involve some hold time, but it is a critical part of the process.
Tip: Focus on one point at a time.
Step 5: Monitor the Transfer and Invest Your Funds
Once the transfer is initiated, you can track its progress on the Vanguard website. The transfer can take anywhere from 2 to 4 weeks to complete.
Watch for the check: In some cases, your employer's plan might still send the check to you. If this happens, do not cash it! Immediately mail it to Vanguard with your new account number written on the check.
Check the settlement fund: Once the funds arrive at Vanguard, they will typically be held in a money market or settlement fund.
Invest wisely: This is where you put your money to work! The cash won't automatically be invested. You need to log in and select your investments.
Sub-heading: Choosing Your Investments at Vanguard
Vanguard is known for its low-cost index funds and ETFs. Here are some popular options to consider:
Vanguard Target Retirement Funds: These are a fantastic "set it and forget it" option. They are a single fund that holds a diversified mix of stocks and bonds and automatically rebalances to become more conservative as you get closer to retirement.
Vanguard Total Stock Market Index Fund (VTSAX/VTI): This fund tracks the entire U.S. stock market and provides broad diversification.
Vanguard Total Bond Market Index Fund (VBTLX/BND): This provides exposure to the U.S. bond market.
**Vanguard Total International Stock Index Fund (VTIAX/VXUS):** This fund provides diversification into international markets.
Consult with a financial advisor if you need help determining the right investment mix for your risk tolerance and financial goals.
Step 6: Close the Loop and Confirm Everything
Once your money is invested in your new Vanguard account, it's a good practice to confirm that your Fidelity account is officially closed or has a zero balance.
You can call Fidelity's customer service or check your online account.
Keep the final statements for your records.
Congratulations! You have successfully rolled over your retirement funds. This is a significant step in taking control of your financial future.
QuickTip: Don’t skim too fast — depth matters.
10 Related FAQ Questions
Here are some quick answers to common questions about rolling over funds from Fidelity to Vanguard.
How to find my Fidelity account number? Your account number will be listed on your account statements (paper or electronic) and is visible when you log in to your Fidelity online account.
How to choose between a direct and indirect rollover? Always choose a direct rollover. It avoids tax withholding, penalties, and the 60-day deadline, making the process much safer and simpler.
How to avoid a taxable event during the rollover? Perform a direct rollover of pre-tax funds into a Traditional or Rollover IRA, and Roth funds into a Roth IRA. If you convert pre-tax money to a Roth IRA, you will owe income tax on the converted amount.
How to find Vanguard's mailing address for a rollover check? If you receive the check, you'll need to mail it to Vanguard. For U.S. Mail, use P.O. Box 982901, El Paso, TX 79998-2901. For FedEx, UPS, and other couriers, use 5951 Luckett Court, Suite A1, El Paso, TX 79932-1882. Make sure to write your new Vanguard account number on the check.
How to know if I need a Medallion Signature Guarantee? A Medallion Signature Guarantee is sometimes required for large transfers or if there is a name discrepancy between your accounts. Vanguard's transfer process will inform you if one is needed.
How to roll over an IRA from Fidelity to Vanguard? This is an account transfer, not a rollover. The process is even simpler. You can initiate a "Transfer of Assets (TOA)" from the Vanguard website. Vanguard will handle the entire process of moving your funds "in kind" (i.e., you can keep the same investments) if they are available on the Vanguard platform.
How to check the status of my rollover? You can track the progress of your transfer by logging into your Vanguard account and checking the "Activity & Orders" or "Transfer status" section.
How to choose a Vanguard mutual fund minimum investment amount? Many of Vanguard's mutual funds, including the popular index funds, have a $3,000 minimum investment. Target Retirement Funds have a lower minimum, often $1,000. ETFs can be purchased for any dollar amount.
How to know what to invest in after the rollover? Once the funds arrive, they will be in cash. You must log in and place trades to invest them in your chosen funds. Consider your age, risk tolerance, and long-term goals when selecting investments.
How to handle company stock in my 401(k)? If you have company stock in your 401(k), it can add complexity. You may have the option to transfer it "in kind" or sell it and transfer the cash. This can have tax implications, so it's wise to speak with a tax professional or financial advisor before making a decision.
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