How to move your old 401(k) into a rollover IRA
After you open your new account, we can help you navigate through the rollover process with step-by-step instructions. If there are both pre-tax and post-tax contributions in your 401(k), or you have a Roth 401(k), you might need to open a Roth IRA.* Which IRA should you consider for your rollover?
Get started with a rollover IRA: Decide whether you want to manage the investments in your IRA or have us do it for you.
Fidelity rollover IRA
You are responsible for choosing and managing your investments
Planning & guidance
Access to robust planning tools,3 and support from a Fidelity representative as needed4
No minimum to open an account5
No account5 or advisory fees with this type of retail account
Depending on which investments you choose, there may be underlying fees
Thought leadership, research, 24/7 customer service
Fidelity Go® rollover IRA
We choose and manage your investments using your goals and risk tolerance in this digital account
Planning & guidance
Access to digital planning tools and unlimited 1-on-1 coaching calls with a dedicated team of Fidelity advisors once your account balance reaches $25,0004
No minimum to open an account6
$0 for under $25,000 and 0.35%/yr for $25,000 and above
Invests in Fidelity mutual funds that do not charge management fees or, with limited exceptions, fund expenses
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Looking for a more hands-on managed approach?
You might want to consider Fidelity® Wealth Services for your planning and investment management needs. Minimum investment is $50,000 for access to a team of advisors or $500,000 for a dedicated advisor.7
How to move your old 401(k) into a rollover IRA
Don't forget these important steps
For a Fidelity rollover IRA:
After you move your money, it's a good idea to make sure it's still invested and aligned with your goals. This is a very important step—investing is how your money has the potential to grow over time.
For a Fidelity Go® rollover IRA or Fidelity® Wealth Services:
You don't need to choose or manage your investments—we do that for you based on the information you gave us.
Once your Fidelity Go rollover IRA reaches $25,000, or if you are a Fidelity Wealth Services customer, consider setting up an appointment to review your full financial picture. That's why we're here!
Can I roll over assets into my Traditional IRA?
Yes, you can but it's important to be aware that if you do roll pre-tax 401(k) funds into a traditional IRA, you may not be able to roll those funds back into an employer-sponsored retirement plan. Contact your tax advisor for more information.
Will I owe taxes on my rollover?
Generally, there are no tax implications if you complete a direct rollover and the assets go directly from your employer-sponsored plan into a Rollover or Traditional IRA via a trustee-to-trustee transfer.
However, if you choose to convert some or all of your savings in your employer-sponsored retirement plan directly to a Roth IRA, the conversion would be subject to ordinary income tax. Contact your tax advisor for more information.
If you withdraw the assets from your former employer‑sponsored retirement plan, the check is made payable to you, and taxes are withheld, you may still be able to complete a 60-day rollover. Within 60 days of receiving the distribution check, you must deposit the money into a Rollover IRA to avoid current income taxes.
If taxes were withheld from the distribution, you would have to replace that amount if you want to roll over your entire distribution to your Fidelity IRA. If you hold the assets for more than 60 days, your distribution will be subject to current income taxes and a 10% early withdrawal penalty if you are under age 59½.
What tax forms will I receive for my rollover IRA?
If you rolled over your employer-sponsored plan account directly into a Fidelity IRA, you will receive a Form 1099-R from the trustee of the plan showing the distribution, as well as a Form 5498 from Fidelity in January showing the IRA rollover. If you make a prior year contribution between January and the tax filing deadline, you will receive a revised 5498 in May. Form 5498 summarizes your IRA contributions, rollovers, holdings, and fair market value. This form is informational only and does not need to be filed with your taxes. For help with this tax form, see the IRS Instructions for Form 5498 (PDF).
What tax form will I receive for my IRA withdrawals?
If you made withdrawals (of $10 or greater) from an IRA, you will receive Form 1099-R from Fidelity in January. For more details on Form 1099-R and reporting the withdrawals on your return, see the IRS Instructions for Form 1099-R (PDF).
Can I move an existing IRA from another institution to Fidelity?
Yes, visit IRA Transfers for a quick overview of the online process.
Can I roll my money into a Roth IRA?
Most people are eligible to convert their 401(k) to a Roth IRA; however, it is important to be aware of the potential tax implications. If you have money in a designated Roth 401(k), you can roll it directly into a Roth IRA without incurring any tax penalties. However, if the 401(k) funds are pre-tax, then converting to a Roth IRA will be a taxable event. Nevertheless, a conversion has the potential to help reduce future taxes and maximize retirement savings. There are several factors to consider when deciding if converting to a Roth IRA may be right for you. Call Fidelity for more information about converting your savings to a Roth IRA.
How do I know if I am eligible for a rollover?
Generally there must be a distributable event. The most common eligibility event is when an individual leaves the service of their employer. Other reasons may include attainment of age 59½, death, or disability. Please contact your plan to determine whether or not you are eligible for a distribution and, therefore, a rollover.
Can I add more money to my IRA later?
Yes, you can add money to your IRA with either annual contributions or you can consolidate other former employer-sponsored retirement plan or IRA assets. Some people choose to make their annual contributions to their IRA so that they only have to keep track of one account. This may be right for you if you have no desire to roll these assets back to a qualified retirement plan at a future employer. Assets can be commingled and still be eligible to roll into another employer plan in the future; however, it is at the discretion of the receiving plan to determine what type of assets can be rolled over.
Can I leave my former employer-sponsored retirement plan assets in my current plan indefinitely?
No, generally you must begin to take withdrawals, known as required minimum distributions (RMDs), from all your retirement accounts (excluding Roth IRAs) no later than April 1st of the year following the year in which you turn age 73. If you wait until April 1st, you will then be required to take your second distribution by the end of that year.
Check with your plan administrator to see if there are any other rules that may require the money to be taken out prior to you turning age 73. For example, many plans require that accounts smaller than $5,000 be cashed out or rolled over. Learn more about RMDs.
Can I leave a portion of my 401(k) in an old employer's plan and roll the remaining amount to an IRA?
Plans have different rules and requirements for 401(k) assets. Some 401(k) plans offer equal flexibility to both current and former employees while others place restrictions on withdrawal types and frequency. For example, some plans may allow partial withdrawals while others may require that you either leave all the funds in the plan or perform a full rollover or cash payout. Please check the plan's rules for more information.
Can I roll over my existing 401(k) assets into an IRA while I'm still working?
Generally, you cannot roll over funds from your active 401(k), but there are some exceptions. For example, some plans allow for "in service" withdrawals at age 59½. If you are under age 59½, or if your plan does not have that withdrawal provision, you may be able to withdraw (or roll over) specific types of contributions. For example, if in the past you rolled money directly from an old 401(k) into your current plan, you may be able to move that money out of your plan into an IRA.
Can I roll over an old 401(k) that has both pre-tax and after-tax money in it?
You can, but it is important to select the right IRA for your needs. A Traditional (or Rollover) IRA is typically used for pre-tax assets because savings will stay invested on a tax-deferred basis and you won't owe any taxes on the rollover transaction itself. However, if you roll pre-tax assets into a Roth IRA, you will owe taxes on those funds. For after-tax assets, your options are a little more varied. You can roll the funds into a Roth IRA tax-free. You also have the option of taking the funds in cash or rolling them into an IRA along with your pre-tax savings. If you choose the latter option, it is important that you keep track of the after-tax amount so that when you start taking distributions, you'll know which funds have already been taxed. IRS Form 8606 is designed to help you do just this. Before making a decision, please consult with a tax advisor about your specific situation.
If I leave my current employer, can my vested participation in a defined benefit plan be rolled into an IRA?
The answer depends on the rules of your defined benefit plan, and the type of defined benefit plan. Defined benefit plans, often called pension plans, are qualified accounts, meaning that they contain money that has not been taxed as income. Historically, such plans do not allow this type of transfer until you officially retire, whether or not you were an active employee at the time of retirement. However, as the workforce environment and IRS rules have changed over time, many pension plans now afford greater flexibility.
If your defined benefit plan offers the proper type of distribution, you could roll it over to an IRA or to a new employer's plan, if the plan allows. You should check with your current employer to determine if they will accept a rollover of this type. However, before making a decision, consider that a pension can be a great source of guaranteed income in retirement and should not be dismissed unless you have a specific plan for generating enough income without the pension payments.
What is Net Unrealized Appreciation (NUA)?
Net unrealized appreciation is the difference between the price you initially paid for an employer security (its cost basis) and its current market value.
When is a Net Unrealized Appreciation (NUA) strategy favorable?
For retirement plan participants who own employer stock that has grown in value from its original cost, it may be beneficial to adopt an NUA strategy for the employer stock. Generally, from a tax perspective, it is more favorable for participants to roll over their retirement plan assets to an IRA or new employer-sponsored plan rather than take a lump-sum distribution. However, for participants who have large amounts of appreciated company stock, it may be more beneficial to take a lump-sum distribution including company stock in-kind instead because it allows them to pay long term capital gains rates on a portion of their tax-deferred assets instead of paying the typically higher ordinary income rates. Consult your tax advisor for more information.
- An individual owns 1,000 shares of company stock with a current fair market value of $200,000.
- An individual paid $40 per share for a cost basis of $40,000.
- An individual's Net Unrealized Appreciation is $160,000 ($200,000 – $40,000).
In order to qualify for NUA, you must meet all of the criteria listed below:
- You must experience one of the following:
- Separation from service from the company whose plan holds the stock (except in the case of self-employed workers)
- Reaching age 59½
- Total disability (for self-employed workers only)
- You must distribute your entire vested balance in your plan within one tax year (though you don't have to take all distributions at the same time).
- You must distribute all assets from all qualified plans you hold with the employer, even if only one holds company stock.
- You must take the distribution of company stock as actual shares. You may not convert them to cash before the distribution. Not all companies allow in‑kind distributions, so be sure to check whether it's an option in your plan.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
Be sure to consider all your available options and the applicable fees and features of each before moving your retirement assets.
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.
The change in the RMDs age requirement from 72 to 73 applies only to individuals who turn 72 on or after January 1, 2023. After you reach age 73, the IRS generally requires you to withdraw an RMD annually from your tax-advantaged retirement accounts (excluding Roth IRAs, and Roth accounts in employer retirement plan accounts starting in 2024). Please speak with your tax advisor regarding the impact of this change on future RMDs.
Fidelity's Planning and Guidance center allows you to create and monitor multiple independent financial goals. While there is no fee to generate a plan, expenses charged by your investments and other fees associated with trading or transacting in your account would still apply. You are responsible for determining whether, and how, to implement any financial planning considerations presented, including asset allocation suggestions, and for paying applicable fees. Financial planning does not constitute an offer to sell, a solicitation of any offer to buy, or a recommendation of any security by Fidelity Investments or any third-party.
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