How To Transfer 401k From Fidelity To Vanguard

Move Money Into The Tsp

Whether youre a civilian employee, a member of the uniformed services, or a separated participant, you can move money from other eligible plans to your existing TSP account. However, you cannot open a TSP account by transferring money into it.

Things to know:

We will accept both transfers and rollovers of tax-deferred money from traditional IRAs, SIMPLE IRAs, and eligible employer plans such as a 401 or 403 into the traditional balance of your account.

We will accept only transfers of qualified and non-qualified Roth distributions from Roth 401s, Roth 403s, and Roth 457s into the Roth balance of your account. If you dont already have a Roth balance in your existing TSP account, the transfer will create one.

We will not accept Roth rollovers that have already been paid to you and will not accept transfers or rollovers from Roth IRAs.

The Process Was Dead Simple

This part really surprised me. As I thought about how to start the process, I decided to call Vanguard to see what information about my Rollover IRA I would need to give Fidelity. I already had the IRA account from a rollover six years ago, but had long forgotten the actually steps needed to get the process moving.

My call was routed to a department that does nothing but handle rollovers. The rep walked me through the process, and then offered to call Fidelity with me. So he dialed up Fidelity and did all the talking. I guess Vanguard really wanted my money!

We did hit one snag. According to the Fidelity representative, my old employer still had my status as an active employee. So I had to call my employer to get my status changed. That took a few days, and then the three of us got back on the phone to complete the rollover. It took all of five minutes.

You can check out an even more detailed description of the 401k rollover process here.

Transferring Dividend Stocks From Td Ameritrade To Fidelity

My retirement accounts are now completely transferred from Vanguard to Fidelity. But I still have additional taxable accounts with TD Ameritrade and the no-fee broker, M1 Finance. These two accounts are the focus of my .

At this stage, I am planning to transfer the TD Ameritrade account to Fidelity when Im ready.

My TD Ameritrade dividend growth portfolio has also grown to a six-figure account. But Im not an active trader. I buy stocks and collect dividends. Then I reinvest the dividends into more dividend-paying stocks. Ive almost always been happy with them.

I dont need a fancy trading platform. My priority now is to simplify my life a bit. Fidelity is an equally capable online brokerage for my needs, so it makes sense to move my money there.

Fidelity charges $4.95 per stock trade while TD Ameritrade charges $6.95 is now commission-free as of October 2019!

The only hesitation I have is the cost basis data on record at TD Ameritrade. When I transferred my decades-old DRIPs , I had to update the cost basis from my records. Since these were DRIPs, there were dozens of transactions for each.

Im afraid that when I transfer my holdings, the cost basis will not be transferred correctly or at all. Ive seen this screwed up many times. I will back up my cost basis very carefully in case I have to resubmit the data.

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What Happens If A Check From My Former Employer Plan Is Made To Me

The distribution will be subject to mandatory tax withholding of 20%, even if you intend to roll it over later. This withholding can be credited to your income tax liability when you file your federal tax return if you roll over the full amount of any eligible distribution you receive within 60 days.

If you are not able to make up for the 20% withheld, the IRS will consider the 20% a taxable distribution it will be subject to regular income tax and, if you are under age 59½, an additional 10% early-withdrawal penalty.

Where Should You Transfer Your 401

You have several options on what to do with your 401 savings after retirement or when you change jobs. For example, you can:

The right choice depends on your needs, and thats a choice everybody needs to make after evaluating all of the options.

Want help finding the right place for your retirement savings? Thats exactly what I do. As a fee-only fidicuary advisor, I can provide advice whether you prefer to pay a flat fee or youd like me to handle investment management for you, and I dont earn any commissions. To help with that decision, learn more about me or take a look at the Pricing page to see if it makes sense to talk. Theres no obligation to chat.

Important:The different rules that apply to 401 and IRA accounts are confusing. Discuss any transfers with a professional advisor before you make any decisions. This article is not tax advice, and you need to verify details with a CPA and your employers plan administrator. Likewise, only an attorney authorized to work in your state can provide guidance on legal matters. Approach Financial, Inc. does not provide tax or legal services. This information might not be applicable to your situation, it may be out of date, and it may contain errors and omissions.

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Invest Your Newly Deposited Funds

You’ll have to choose investments in your new IRA so your money can grow. Make sure to maintain an appropriate asset allocation given your age, and consider your risk tolerance.

Finally, when your new IRA has been opened, be sure to read up on common IRA mistakes to avoid, such as forgetting required minimum distributions, not designating beneficiaries, and trading too often in the account.

How Long Does It Take To Complete My Transfer

Generally, if your transfer is eligible for online submission, it takes from five to seven business days to complete your transfer. If your transfer is not eligible for online submission and you have to mail a form to Fidelity, your request will be submitted to the delivering firm upon receipt. Most firms complete transfer requests within two to three weeks, depending on the types of securities and how quickly the delivering firm transfers your assets. Fidelity cannot accept orders to trade based on your transferred assets until your assets have been delivered to Fidelity.

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How Much Does It Cost To Roll Over A 401 To An Ira

If you do the process correctly, there should be few or no costs associated with rolling over a 401 to an IRA. Some 401 administrators may charge a transfer fee or an account closure fee, which is usually under $100.

Because moving your money from a 401 to an IRA allows you to avoid the 10% early withdrawal penalty that results if you withdraw money from a 401 before 59 1/2, it’s a far better option if you can’t keep your money invested in an old employer’s plan or move it to a 401 at your new company.

You should consider whether rolling over a 401 to an IRA is a better option than either leaving it invested when you leave your job or moving the money to your new employer’s retirement plan. If you can avoid 401 management fees and gain access to investments with lower expense ratios, an IRA may be a cheaper account option.

When Changing Jobs Is This Your Best Option

When an employee leaves a job due to retirement or termination, the question about whether to roll over a 401 or other employer-sponsored plan quickly follows. A 401 plan can be left with the original plan sponsor, rolled over into a traditional or Roth IRA, distributed as a lump-sum cash payment, or transferred to the new employers 401 plan.

Each option for an old 401 has advantages and disadvantages, and there is not a single selection that works best for all employees. However, if an employee is considering the option of transferring an old 401 plan into a new employer’s 401, certain steps are necessary.

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Transferring Your 401 To Your Bank Account

You can also skip the IRA and just transfer your 401 savings to a bank account. For example, you might prefer to move funds directly to a checking or savings account with your bank or credit union. Thats typically an option when you stop working, but be aware that moving money to your checking or savings account may be considered a taxable distribution. As a result, you could owe income taxes, additional penalty taxes, and other complications could arise.

IRA first? If you need to spend all of the money soon, transferring from your 401 to a bank account could make sense. But theres another option: Move the funds to an IRA, and then transfer only what you need to your bank account. The transfer to an IRA is generally not a taxable event, and banks often offer IRAs, although the investment options may be limited. If you only need to spend a portion of your savings, you can leave the rest of your retirement money in the IRA, and you only pay taxes on the amount you distribute .

Again, moving funds directly to a checking or savings account typically means you pay 20% mandatory tax withholding. That might be more than you need or want. Most IRAs, even if theyre not at your bank, allow you to establish an electronic link and transfer funds to your bank easily.

Vanguard Vs Fidelity: Online And Mobile Experience

Both brokerages have robust online and mobile experiences. So while each firm has features and investments that favor specific types of clients, the quality of their tools and platforms are unquestionably strong.

Vanguards trading platform and apps are fairly basic, in keeping with the general aesthetic of the company. You can do everything you need to do as a low-level investor make trades, buy mutual funds and check your performance. The platforms dont have all the bells and whistles an experienced investor might want, but for someone who just wants to manage a few basic investments, it works.

Fidelity, on the other hand, has a more complicated and extensive online and mobile experience. While this may be a bit overwhelming for someone without a ton of investing experience, if you have been trading for awhile, Fidelity may help you take your investing game to the next level.

In April 2021, Vanguards mobile app has a major variance in its satisfaction level among users. For the Apple version, users rate it at 4.7 stars out of 5 across over 167,000 reviews. But on the Google Play store, Android users rate it at just 2.2 stars out of 5 across more than 5,350 reviews. The brokerage is releasing a new app called Vanguard Beacon, though, and it promises to have more features and tools for clients.

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Start Your Transfer Online

You’ll get useful tips along the way, but you can call us if you have a question.

You’ll need to:

• Enter the account information requested. Your instructions from that point will depend on the company holding your account and your account information. Not all transfers follow the same process, so we’ll ask only for the information needed to complete your particular type of transfer.
• Enter your personal information, such as your birth date and Social Security number, or if you’re already a Vanguard client, confirm the information that we’ve been able to prefill for you.
• Review your information and click Submit.

Want an idea of how long a transfer could take?

A Word About Ira Transfers & Taxes

You can transfer an IRA from one financial company directly into a new or existing IRA at another company as often as you need to without any tax consequences. These transfers are convenient electronic transactions with typically no checks involved. If you have a special situation that may not allow for an easy direct transfer, we recommend that you consult a tax advisor.

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How Does My Cost Basis Information Transfer

If your delivering firm participates in the Cost Basis Reporting Service , your cost basis information will transfer when you complete Fidelity’s online transfer submission process. Cost basis data is typically passed within ten days after the transfer. If your cost basis information does not transfer, you can input the information manually on Fidelity.com.

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Contact Your 401 Provider

Youre making great progress. You know where your 401 is and you have an IRA at Fidelity to transfer your money into. The next step is to initiate your rollover by contacting your 401 provider.

Often, the easiest way to do this is by phone. Your 401 providers phone number should be visible on an old account statement.

In order for your call to go smoothly, follow these tips:

Reasons You May Want To Roll Over Now

• Diversification. Investment options in your 401 can be limited and are selected by the plan sponsor. Rolling your funds over into an IRA can often broaden your choice of investments. More choices can mean more diversification in your retirement portfolio and the opportunity to invest in a wider range of asset classes including individual stocks and bonds, managed accounts, REITs and annuities.
• Beneficiary flexibility. With some IRAs, you may be able to name multiple and contingent beneficiaries or name a trust as the beneficiary. Other IRAs may allow you to impose restrictions on beneficiaries. These options aren’t usually available with 401s. But, keep in mind, not all IRA custodians have the same rules about beneficiaries so be sure to check carefully.
• Ownership control. You are the owner and have access rights with an IRA. The assets in your IRA are also not subject to blackout periods. With a 401 plan, the qualified plan trustee owns the assets and assets may be subject to blackout periods in which account access is limited.
• Distribution options. If your IRA is set up as a Roth IRA, there is not a set age when the owner is required to take minimum distributions. With 401 plans and traditional IRAs, the owner will have to take required minimum distributions by April 1 of the year after they turn age 72.

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Vanguard Vs Fidelity Iras: The Biggest Differences

When it comes to IRAs, Vanguard and Fidelity are neck and neck in many areas. Both offer traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs, and many other retirement accounts for individuals and small businesses. The two platforms also give investors the option to manage eligible IRAs on their own or utilize automated portfolios and/or advisor assistance.

Fidelity, however, has a wider range of IRA options. Unlike Vanguard, Fidelity offers a Roth IRA account for minors. The brokerage could also suit those in search of lower costs, mainly because most of its index mutual funds have no minimum requirements .

Vanguard’s advisor-assisted, automated investing account has Fidelity’s equivalent account beat when it comes to advisory fees, but Fidelity is still hard to pass up on the account minimum end.