Have you recently left a job and are wondering what to do with your old 401(k)? Or perhaps you have multiple old 401(k)s scattered across different providers and want to consolidate them? Bringing your retirement savings together in one place, like Fidelity, can simplify your financial life, give you more control, and potentially open up a wider range of investment options. This comprehensive guide will walk you through the process of adding your 401(k) to Fidelity, step-by-step. Let's get started on securing your financial future!
How to Add Your 401(k) to Fidelity: A Step-by-Step Guide
Adding your 401(k) to Fidelity typically involves a "rollover," which is the process of transferring funds from one retirement account to another without incurring taxes or penalties (as long as you follow the rules). Most commonly, you'll roll your old 401(k) into a Fidelity IRA (Individual Retirement Account) or, if permitted, into a new 401(k) plan at Fidelity through a current employer.
Step 1: Discover Your Old 401(k) Details and Decide Your Path
Before you can move your money, you need to know exactly what you're working with. This initial discovery phase is crucial.
Sub-heading: Gathering Your 401(k) Information
Identify Your 401(k) Provider: This is the financial institution where your old 401(k) is currently held. It might be a large company like Vanguard, Empower, or even Fidelity itself if your previous employer used them.
Tip: Check old statements, off-boarding emails from your former HR, or even contact your previous employer's HR department if you're unsure.
Determine Your 401(k) Type: Is it a Traditional 401(k) (pre-tax contributions) or a Roth 401(k) (after-tax contributions)? This impacts the type of IRA you should open at Fidelity to avoid tax complications. If you have both, you might need to open both a Traditional and a Roth IRA.
Locate Your Account Number and Contact Information: Have your old 401(k) account number readily available, along with the customer service phone number for your current provider.
Understand Your Plan's Rules: Some 401(k) plans might have specific requirements or limitations for rollovers, such as minimum balance requirements to keep the account open with them, or rules regarding in-kind transfers (transferring investments as-is, rather than selling them first).
Sub-heading: Choosing Your Destination at Fidelity
You generally have two main options when rolling over an old 401(k) to Fidelity:
Option A: Roll into a Fidelity IRA (Individual Retirement Account): This is the most common and often recommended path.
Benefits: Greater investment choices, potentially lower fees than your old 401(k), and easier consolidation if you have multiple old 401(k)s. You also have more control over your investments.
Types of IRAs:
Traditional IRA: If you're rolling over a Traditional 401(k) (pre-tax dollars), you'll typically roll it into a Traditional IRA to maintain tax-deferred growth. No immediate taxes are due.
Roth IRA: If you're rolling over a Roth 401(k) (after-tax dollars), you'll roll it into a Roth IRA. No immediate taxes are due.
Traditional 401(k) to Roth IRA Conversion: You can convert a Traditional 401(k) to a Roth IRA, but be aware that the entire amount converted will be subject to income tax in the year of the conversion. This can be a strategic move for future tax-free withdrawals in retirement, but consult a tax advisor first.
Option B: Roll into a New Employer's 401(k) at Fidelity (if applicable): If your new employer's 401(k) plan is administered by Fidelity and allows incoming rollovers, this can be a good option for keeping all your active retirement savings in one place.
Benefits: Simpler management if you prefer to have all your retirement savings under your current employer's plan.
Consideration: Your investment options will be limited to those offered by your new employer's plan, and there might be fees associated with that plan. Always confirm with your new employer's HR or plan administrator if their 401(k) accepts rollovers.
Step 2: Open Your Fidelity Account (If You Don't Have One)
If you've decided to roll your 401(k) into a Fidelity IRA or if you don't yet have a Fidelity account for your new employer's 401(k), this is your next step.
Sub-heading: Opening a Fidelity IRA
Visit the Fidelity Website: Go to Fidelity.com and look for options to "Open an Account."
Choose the Right IRA Type: Select either a Traditional IRA or a Roth IRA, based on your 401(k) type from Step 1.
Provide Personal Information: You'll need your Social Security number, driver's license or state ID, and employer information.
Fund the Account (Optional, but recommended): While you're primarily rolling over funds, you can also make an initial contribution to your new IRA if you wish.
Review and Confirm: Carefully review all the information before submitting your application. The process is generally straightforward and can be completed online in minutes.
Sub-heading: Confirming Your New Employer's Fidelity 401(k)
If you're rolling into a new employer's 401(k) at Fidelity, you likely already have an account setup or will be guided through the enrollment process by your employer's HR.
Make sure you have access to your NetBenefits account, which is Fidelity's portal for employer-sponsored plans.
Step 3: Initiate the Rollover with Your Old 401(k) Provider
This is where the actual transfer process begins.
Sub-heading: Contacting Your Old 401(k) Provider
Call Them Directly: The easiest way to initiate a rollover is often by calling your old 401(k) plan administrator. Have your old account statement handy.
State Your Intent: Clearly tell them you wish to perform a "direct rollover" of your 401(k) balance to a Fidelity IRA (or your new employer's 401(k) at Fidelity).
Request a Direct Rollover: This is critical. A direct rollover means the money goes directly from your old provider to Fidelity. If they send the check to you, it's an "indirect rollover" and comes with strict 60-day deadlines and potential tax withholdings.
For Direct Rollovers to a Fidelity IRA: The check should be made payable to "Fidelity Management Trust Company (or FMTC), FBO [Your Name]."
For Direct Rollovers to a Fidelity Employer 401(k): The check should be made payable to "Fidelity Investments Institutional Operations Company, Inc. (or FIIOC), FBO [Your Name]."
Provide Fidelity's Information: Your old provider will need Fidelity's mailing address for rollovers.
Regular Mail: Fidelity Management Trust Company, PO Box 770001, Cincinnati, OH 45277-0037
Overnight Mail: Fidelity Management Trust Company, 100 Crosby Parkway KC1H, Covington, KY 41015-0037
Inquire About Required Forms: Your old provider might require you to complete their specific distribution or rollover request forms. Ask them to send these to you.
Ask About Processing Time: Get an estimate of how long the rollover process typically takes. This can vary significantly between providers.
Sub-heading: What to Expect During the Call
Be prepared for some hold time.
The representative will likely verify your identity.
They may try to convince you to keep your money with them. Politely decline if you've decided to move your funds to Fidelity.
Do not agree to an "indirect rollover" unless you fully understand the implications and are prepared to handle the 60-day rule and potential tax withholding.
Step 4: Complete Any Necessary Paperwork and Monitor the Transfer
Once you've initiated the request with your old provider, there might be some follow-up steps.
Sub-heading: Fidelity's Role and Your Actions
Fidelity's Letter of Acceptance (LOA): Sometimes, your old 401(k) provider might require a "Letter of Acceptance" from Fidelity, confirming they will accept the rollover. Fidelity can typically generate this for you.
Incoming Rollover Contribution Form: Fidelity may have a specific form you need to complete to properly direct the incoming funds to your new account. You can usually find this on NetBenefits (for employer plans) or the Fidelity website for IRAs.
Mailing the Check (if sent to you): If, for some reason, your old provider insists on sending the rollover check to you (an indirect rollover), you must deposit it into your Fidelity IRA within 60 days of receiving it to avoid taxes and penalties. Make sure the check is made payable to Fidelity, FBO your name, not directly to you.
You can often use Fidelity's mobile check deposit via their app for the fastest deposit.
Alternatively, you can mail the check to Fidelity.
Sub-heading: Tracking Your Rollover
Stay in Touch: Keep track of the estimated processing time given by your old provider. If the funds don't appear in your Fidelity account within that timeframe, follow up with your old provider first.
Check Your Fidelity Account: Regularly log in to your Fidelity account to monitor the status of the incoming funds. You'll typically see a "pending" or "in transit" status before the funds are fully settled.
Step 5: Invest Your Funds and Consolidate (If Applicable)
Once the funds arrive at Fidelity, the final and exciting step is to put your money to work!
Sub-heading: Choosing Your Investments
Review Your Options: Fidelity offers a vast array of investment choices, including mutual funds, ETFs, individual stocks, bonds, and more.
Consider Your Risk Tolerance and Goals: Select investments that align with your long-term retirement goals and your comfort level with risk.
Utilize Fidelity's Tools and Resources: Fidelity provides numerous online tools, research, and educational materials to help you make informed investment decisions. You can also get guidance from a Fidelity representative.
Set Up Your Asset Allocation: Determine how you want to diversify your investments across different asset classes (e.g., stocks, bonds, cash).
Sub-heading: Consolidating Multiple Accounts
If you've rolled over one 401(k) and have others, repeat the process for each old plan.
Having all your retirement savings in one place (a single Fidelity IRA, for instance) offers a unified view of your portfolio, simplifies rebalancing, and can help you avoid duplicate investments or unnecessary fees.
By following these steps, you can successfully add your 401(k) to Fidelity and take a significant step towards simplifying and optimizing your retirement savings.
Frequently Asked Questions (FAQs)
Here are 10 common questions about rolling over a 401(k) to Fidelity:
How to initiate a direct rollover to Fidelity?
You initiate a direct rollover by contacting your old 401(k) plan administrator and specifically requesting that they send the funds directly to Fidelity, rather than sending the check to you. Provide them with Fidelity's mailing address and account information.
How to avoid taxes and penalties during a 401(k) rollover?
To avoid taxes and penalties, ensure you perform a direct rollover where the funds go directly from your old plan to Fidelity. If you receive the check, you must deposit the full amount into a qualified retirement account at Fidelity within 60 days.
How to choose between a Traditional IRA and a Roth IRA for my rollover?
If your old 401(k) was a Traditional 401(k) (pre-tax contributions), roll it into a Traditional IRA to maintain tax-deferred growth. If it was a Roth 401(k) (after-tax contributions), roll it into a Roth IRA. If you convert a Traditional 401(k) to a Roth IRA, you'll owe taxes on the converted amount.
How to find my old 401(k) account information?
Check old account statements, emails from your former employer or plan administrator, or contact your previous employer's HR department.
How to deposit a rollover check into my Fidelity account?
If your old provider sent the check to you (payable to "Fidelity Management Trust Company FBO [Your Name]"), you can use Fidelity's mobile check deposit feature on their app, or mail the check to one of Fidelity's rollover addresses.
How to get help from Fidelity during my rollover?
You can contact Fidelity's customer service by phone (typically 1-800-343-3548 for personal accounts or 1-800-835-5097 for employer-sponsored accounts) or use their online chat service.
How to invest my rolled-over funds at Fidelity?
Once the funds are in your Fidelity account, you can log in online or use the Fidelity app to choose from their wide range of investment options, including mutual funds, ETFs, stocks, and bonds. Consider your risk tolerance and financial goals.
How to handle multiple old 401(k) accounts?
You can repeat the rollover process for each old 401(k) and consolidate them into a single Fidelity IRA, simplifying your retirement planning.
How to know if my new employer's 401(k) at Fidelity accepts rollovers?
Contact your new employer's HR department or the 401(k) plan administrator (often accessible through Fidelity NetBenefits) to inquire about their plan's rules regarding incoming rollovers.
How to understand the fees associated with my old 401(k) versus a Fidelity IRA?
Request a fee disclosure from your old 401(k) provider and compare it to Fidelity's fee structure for IRAs, which often have no annual account fees and offer low-cost or commission-free investments. This comparison can help you understand the long-term benefits of consolidating.
