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Rollovers and Other Options for an Old 401(k)

Learn about your options and their advantages.

Rolling over your old 401(k) to an IRA can help you manage your retirement savings more efficiently; plus, you may pay less in account fees.

Fidelity makes the rollover process easy. We have dedicated rollover specialists available to help with anything from a quick question to guiding you through each step of the rollover process.

You have several choices when you retire or change jobs. You can:

  • Roll over your assets into an IRA.
  • Roll over your assets to your current employer’s plan (if you have a new job and the plan permits it).
  • Keep your assets in your former employer’s plan (if the plan permits it).
  • Take a distribution in cash (taxes will apply and withdrawal penalties may apply).

Compare your options

Use the chart below to determine if consolidating your retirement savings into an IRA or 401(k) makes sense, in light of your specific needs and situation.

You can also call 800-343-3548 and speak to a rollover specialist who can help you understand your options.

Roll over to a Fidelity IRA

Roll over to the new employer's plan

Leave money in your former employer's plan

Potential tax-deferred growth of your money


Investment options

Ability to invest in mutual funds, stocks, bonds, ETFs, and FDIC-insured CDs Can vary by plan; lower-priced investments may be available Can vary by plan; lower-priced investments may be available

Continue tax-deferred contributions


Potential penalty-free withdrawals for qualifying first home purchase and college expenses


Potential to take penalty-free distributions at age 553


Potential to defer minimum required distributions if you are over age 70½


Asset protection from creditors


If you hold appreciated employer stock in your plan

Special tax treatment may be available for your stock ("Net Unrealized Appreciation"). Consult your tax advisor for more information.

Fees and expenses

No annual account or maintenance fee* Varies by plan Varies by plan
* There is no cost to open and no annual fee for Fidelity's Traditional, Roth, SEP, and Rollover IRAs. A $50 account close out fee may apply. Fund investments held in your account may be subject to management, low balance and short term trading fees, as described in the offering materials. For all securities, see the Fidelity commission schedule (PDF) for trading commission and transaction fee details.

Cashing out of a 401(k)

Depending on your plan and your situation, you may choose to take the money out of your 401(k) plan. If you cash out, you will gain immediate access to your money, which may suit your needs if you face an unexpected hardship.

However, your cash distribution will be subject to state and federal taxes and, before age 59½, a 10% withdrawal penalty may apply.5 By rolling over your old 401(k) to an IRA, the early withdrawal penalty will not apply.

Additionally, if you cash out of your 401(k), your money will no longer have the potential to continue to grow tax-deferred.

In other words, you would have almost none of the advantages in the chart above.

Next steps

What to do with an old 401(k)
Read this Fidelity Viewpoints® article on weighing the pros and cons of your options.

Open a Rollover IRA.
Moving 401(k) assets to a Fidelity IRA is easy.

Choosing investments for your IRA 
Get help selecting from Fidelity’s wide range of investments.

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.
1. Traditional or Rollover IRA
2. The new employer may impose a waiting period.
3. You may take penalty free distributions from a qualified employer plan if you terminate employment with the employer sponsoring the plan during or after the year you reach age 55.
4. IRAs are protected under federal bankruptcy law; state law creditor protection of IRAs varies. Consult your legal adviser for more detailed information.
5. The taxable portion of your withdrawal that is eligible for rollover into an individual retirement account (IRA) or another employer's retirement plan is subject to 20% mandatory federal income tax withholding, unless it is directly rolled over to an IRA or another employer plan. (You may owe more or less when you file your income taxes.) If you are under age 59½, the taxable portion of your withdrawal may also be subject to a 10% early withdrawal penalty, unless you qualify for an exception to this rule. Be sure you understand the tax consequences and your plan’s rules for distributions before you initiate a distribution. You may want to consult your tax advisor about your situation.