Moving your 401(k) from one provider to another, especially from a long-standing one like Merrill Lynch to a new one like Fidelity, can seem like a daunting task. But imagine the peace of mind you'll have knowing your retirement savings are consolidated and managed exactly how you want them to be! This comprehensive guide will walk you through every step, ensuring a smooth and tax-efficient transfer.
Your Essential Guide: Transferring Your 401(k) from Merrill Lynch to Fidelity
So, you've decided to move your 401(k) from Merrill Lynch to Fidelity. Excellent choice! This often happens when you change jobs, seek better investment options, or simply prefer Fidelity's platform and services. Regardless of your reasons, a proper rollover is key to maintaining the tax-deferred status of your retirement savings. Let's get started on this journey together!
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| How To Transfer 401k From Merrill Lynch To Fidelity |
Step 1: Understand Your Merrill Lynch 401(k) and Its Options
Before you even think about Fidelity, you need to get a clear picture of your current 401(k) at Merrill Lynch.
Sub-heading: Gathering Your Merrill Lynch Account Information
Locate Statements and Login Credentials: Dig out your most recent Merrill Lynch 401(k) statements. These will have crucial details like your account number, vested balance, and the types of investments you currently hold. Ensure you have your online login information handy as well.
Identify Your Plan Administrator: While Merrill Lynch holds your 401(k) assets, a separate entity (often your former employer or a third-party administrator) might be the official "plan administrator." You'll need to know who this is. This information is usually on your statements or can be obtained from your former HR department.
Review Your Plan's Distribution Options: Call Merrill Lynch's retirement plan services or your plan administrator. Ask specific questions about your 401(k) distribution options.
Can you perform a direct rollover to an IRA at another institution?
Are there any fees associated with a rollover or account closure?
Will they issue a check payable to you or directly to Fidelity? (A direct rollover to Fidelity is always preferred to avoid tax implications and withholding.)
Are there any restrictions on when you can initiate a rollover? (Sometimes there's a waiting period after leaving an employer.)
Sub-heading: Deciding on the Right Rollover Type
You generally have a few options for your old 401(k). For a transfer to Fidelity, the most common and advisable options are:
Direct Rollover to a Fidelity Rollover IRA: This is often the best and most common choice. The funds move directly from Merrill Lynch to a new IRA at Fidelity. This maintains tax-deferred growth and typically offers the widest range of investment options.
Direct Rollover to a New Fidelity 401(k) (If Applicable): If your new employer's 401(k) is also with Fidelity, and if their plan allows it, you might be able to roll your old Merrill Lynch 401(k) directly into your new employer's 401(k) at Fidelity. This consolidates your retirement savings within an employer-sponsored plan.
Indirect Rollover (60-Day Rollover): In this scenario, Merrill Lynch sends you a check directly. You then have 60 days to deposit the full amount into a new retirement account (like a Fidelity IRA). Beware! If you choose this option, Merrill Lynch is required to withhold 20% of your distribution for federal taxes. You'll need to make up that 20% from other sources when you deposit the full amount into Fidelity to avoid penalties and taxes, and then claim the withheld amount back when you file your taxes. It's generally recommended to avoid this if possible.
Tip: Reread the opening if you feel lost.
Step 2: Open Your New Fidelity Account
This is where you start building your new retirement home at Fidelity!
Sub-heading: Choosing the Right Fidelity Account Type
Fidelity Rollover IRA: As mentioned, this is the most common choice. If your Merrill Lynch 401(k) was a Traditional 401(k) (pre-tax contributions), you'll open a Traditional or Rollover IRA at Fidelity. If it was a Roth 401(k) (after-tax contributions), you'll open a Roth IRA. If you had both pre-tax and after-tax contributions in your Merrill Lynch 401(k), you might need to open both a Traditional and a Roth IRA at Fidelity to properly separate the funds.
New Employer's Fidelity 401(k): If you're rolling into a new employer's Fidelity 401(k), you likely already have this account set up. Confirm with your new employer's HR or benefits department that their plan accepts rollovers from previous 401(k)s.
Sub-heading: The Account Opening Process at Fidelity
Online Application: Fidelity makes opening a new account very straightforward online. Visit the Fidelity website (Fidelity.com) and navigate to their "Open an Account" section, specifically looking for IRA options.
Information Needed: Be prepared to provide:
Date of birth
Mailing and email address
Employment information (annual income, household net worth)
Beneficiary information
Funding Selection: During the application, you'll be asked how you intend to fund the account. Select "Roll over from an employer-sponsored plan" or similar option. This is crucial to ensure the transaction is processed as a rollover and not a taxable event.
Account Confirmation: Once your account is opened, you'll receive confirmation and your new Fidelity account number. Keep this handy! You'll need it for the next step.
Step 3: Initiate the Rollover from Merrill Lynch
This is the core of the transfer process. Patience and attention to detail are key here.
Sub-heading: Contacting Merrill Lynch (or your Plan Administrator)
Have Your Information Ready: When you call Merrill Lynch or your plan administrator, have your Merrill Lynch 401(k) account number, your new Fidelity account number, and Fidelity's mailing address for rollovers.
Merrill Lynch contact numbers can be found on their website, typically under "Contact Us" or "Retirement." For 401(k) plans, you might need to call their specific workplace retirement services.
For general Merrill Edge inquiries: 1.888.654.6837 (Advisory Center) or 1.877.653.4732 (Self-Direct Investing).
For Merrill Lynch Wealth Management: 1.800.MERRILL (637.7455).
Request a Direct Rollover: Emphasize that you want a "direct rollover" or "trustee-to-trustee transfer" to your new Fidelity IRA (or 401(k)). This ensures the money never touches your hands, avoiding immediate tax withholding and potential penalties.
Provide Fidelity's Rollover Information: Merrill Lynch will need Fidelity's specific instructions for receiving rollover funds. You may need a "Letter of Acceptance (LOA)" from Fidelity, or Merrill Lynch might have its own forms. Fidelity can provide you with an LOA if needed.
Fidelity's Mailing Address for Rollover Checks (if applicable): Fidelity Management Trust Company PO Box 770001 Cincinnati, OH 45277-0037 For overnight mail: Fidelity Management Trust Company 100 Crosby Parkway KC1H Covington, KY 41015-0037
Confirm Check Details: If Merrill Lynch sends a physical check (even for a direct rollover), confirm it will be made payable to "Fidelity Management Trust Company (or FMTC) FBO [Your Name]" and will include your Fidelity IRA account number. Do not let them make the check payable directly to you unless you are intentionally doing a 60-day indirect rollover and understand the implications.
Anticipate Paperwork: You may need to fill out and sign Merrill Lynch's distribution forms. Follow their instructions carefully.
Tip: The details are worth a second look.
Step 4: Monitor and Confirm the Transfer
Once you've initiated the request, the waiting game begins.
Sub-heading: Tracking Your Rollover
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Merrill Lynch Confirmation: Merrill Lynch should provide you with a confirmation number or estimated timeline for the transfer.
Fidelity Tracking: You can typically track the status of your incoming transfer on Fidelity's website. They often have a dedicated "Transfer of Assets" or "Rollover Status" section. Most transfers take 3-5 business days to complete once Merrill Lynch processes the request and sends the funds. However, it can sometimes take 1-2 weeks for the entire process, especially if checks are mailed.
Alert for Physical Checks: If a physical check is mailed (even if payable to Fidelity), be vigilant. It will likely be sent to your address. Immediately deposit it into your Fidelity account using their mobile check deposit (via the Fidelity Investments app), by mail, or in person at a Fidelity Investor Center. Remember the 60-day rule if the check is somehow made payable to you!
Sub-heading: Verifying Funds in Fidelity
Check Your Fidelity Account: Once the estimated timeframe has passed, log into your Fidelity account to confirm the funds have been received and correctly deposited into your new IRA or 401(k).
Review Transaction History: Verify that the amount transferred matches your expected balance.
Step 5: Invest Your Funds at Fidelity
Congratulations! Your funds are now at Fidelity. The transfer isn't complete until your money is working for you.
Sub-heading: Choosing Your Investments
Explore Fidelity's Offerings: Fidelity offers a vast array of investment options, including mutual funds, ETFs, individual stocks, bonds, and managed accounts. This is often one of the main reasons people transfer their 401(k)s.
Align with Your Goals: Consider your risk tolerance, time horizon, and retirement goals when selecting investments. If you're unsure, Fidelity provides extensive research tools, educational resources, and even access to financial advisors.
Set Up Automatic Investments: Consider setting up a diversified portfolio and perhaps even automated rebalancing to keep your investments on track.
QuickTip: Skim the ending to preview key takeaways.
Sub-heading: Reviewing Your Beneficiaries
Update Beneficiaries: Don't forget this critical step! While your old Merrill Lynch 401(k) had beneficiaries, you need to designate them again for your new Fidelity account. This ensures your assets go to the right people in case of an unforeseen event.
Important Considerations Throughout the Process:
Tax Implications: A direct rollover generally has no immediate tax implications. The goal is to move funds from one tax-advantaged account to another without triggering a taxable event. However, if you roll a pre-tax 401(k) into a Roth IRA, that portion will be taxed in the year of conversion.
Company Stock: If your Merrill Lynch 401(k) held company stock, there might be special considerations regarding Net Unrealized Appreciation (NUA). It's highly advisable to consult with a tax advisor if this applies to you.
Outstanding Loans: If you had an outstanding loan against your Merrill Lynch 401(k), it generally must be repaid before you can roll over the account. If not repaid, the outstanding balance will typically be treated as a taxable distribution and may incur early withdrawal penalties.
Fees: While Fidelity may not charge for incoming rollovers, Merrill Lynch might have outgoing transfer fees or account closure fees. Be sure to ask about these in Step 1.
Professional Advice: For complex situations or if you have any doubts, consider consulting a financial advisor and/or a tax professional.
Frequently Asked Questions (FAQs)
How to Initiate a 401(k) Rollover from Merrill Lynch to Fidelity?
Start by opening a new Rollover IRA (or other appropriate account) at Fidelity. Then, contact Merrill Lynch or your plan administrator to request a direct rollover, providing them with your new Fidelity account details.
How to Find My Merrill Lynch 401(k) Account Number?
Your Merrill Lynch 401(k) account number can be found on your account statements. If you don't have statements, you can log into your Merrill Lynch online account or contact their customer service or your former employer's HR department.
How to Avoid Taxes and Penalties When Rolling Over My 401(k)?
The key is to perform a direct rollover (or "trustee-to-trustee transfer"). This means the funds go directly from Merrill Lynch to Fidelity without passing through your hands. If you receive a check, ensure it's made out to "Fidelity Management Trust Company FBO [Your Name]."
QuickTip: Don’t just scroll — process what you see.
How to Know Which Type of Fidelity IRA to Open?
If your Merrill Lynch 401(k) was a Traditional (pre-tax) 401(k), open a Traditional or Rollover IRA at Fidelity. If it was a Roth (after-tax) 401(k), open a Roth IRA. If you had both, you might need to open both types of IRAs.
How to Track the Status of My 401(k) Rollover?
After initiating the rollover with Merrill Lynch, you can typically track the progress by logging into your new Fidelity account online or by calling Fidelity's customer service or rollover specialists. Merrill Lynch may also provide a confirmation number.
How Long Does it Take to Transfer a 401(k) from Merrill Lynch to Fidelity?
A direct rollover typically takes 3-7 business days for the funds to be processed by Merrill Lynch and appear in your Fidelity account. The entire process, including paperwork, can take 1-2 weeks.
How to Handle Company Stock in My Merrill Lynch 401(k)?
If your 401(k) holds company stock, research the concept of Net Unrealized Appreciation (NUA) before rolling over. This can have significant tax implications, and it's highly recommended to consult a tax advisor to determine the best strategy for your situation.
How to Roll Over a 401(k) with an Outstanding Loan?
Generally, you must repay any outstanding 401(k) loans before you can initiate a rollover. If you don't, the unpaid balance will be considered a taxable distribution and may incur early withdrawal penalties.
How to Contact Fidelity for Rollover Assistance?
You can call Fidelity's main customer service line at 1-800-343-3548. They have specialists who can guide you through the rollover process and answer any questions.
How to Invest My Rolled-Over Funds at Fidelity?
Once the funds are in your Fidelity account, you can log in online and choose from their wide range of investment options, including mutual funds, ETFs, individual stocks, and more. You can also utilize their research tools or speak with a Fidelity representative for guidance based on your financial goals.
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