How to Move Your 401(k) to a Fidelity IRA

You can transfer a 401(k) from a former employer to a Fidelity IRA in two ways: a direct rollover, where your old plan sends the money straight to Fidelity, or an indirect rollover, where you receive the check and deposit it yourself within 60 days

A direct rollover is simpler and safer — your former employer's plan administrator sends the funds directly to Fidelity, and you avoid the risk of missing the 60-day deadline. An indirect rollover gives you temporary access to the money but requires you to redeposit it quickly or face taxes and penalties on the amount you don't roll over.

The process takes roughly two to four weeks from start to finish, though timing depends on how quickly your old plan processes the request and how fast Fidelity receives and credits the funds. You'll need your old plan's account number, the plan administrator's contact information, and a Fidelity IRA already open (or you can open one during the rollover process).

Key Takeaways

• A direct rollover sends money straight from your old 401(k) plan to Fidelity with no tax withholding, while an indirect rollover requires you to deposit the check within 60 days or face a 20% withholding tax plus penalties.
• You can roll over a 401(k) only after you leave your job or reach age 59½ (depending on your plan's rules), so check your plan documents or call your plan administrator first.
• Fidelity accepts rollovers into a Traditional IRA (for pre-tax money) or a Roth IRA (if you convert the funds and pay taxes on the amount converted).
• The entire rollover must be completed within 60 days if you choose an indirect rollover, or the IRS treats the amount as a distribution subject to income tax and a 10% early withdrawal penalty if you're under 59½.
• You can roll over a 401(k) only once per year per IRA, so plan your rollover carefully if you have multiple old plans.

Confirm your old plan allows rollovers and when you can take one

Not all 401(k) plans allow rollovers while you're still employed. Most plans let you roll over funds only after you leave your job, though some allow "in-service" rollovers if you've reached age 59½. Check your plan's summary plan description or call your plan administrator to confirm whether you're may be able to access to roll over now.

If you're still working at the company that sponsors the plan, you may have to wait until you separate from employment. If you've already left, you can usually roll over immediately. Your plan administrator can tell you the exact rules for your plan and whether any restrictions apply.

Choose between a direct rollover and an indirect rollover

In a direct rollover, you instruct your old plan administrator to send the funds directly to Fidelity. You never touch the money. The plan sends a check made out to "Fidelity FBO [Your Name]" (FBO means "for benefit of") or transfers the funds electronically. No taxes are withheld, and the entire balance moves to your new IRA.

In an indirect rollover, your old plan sends you a check for the full amount. The plan is required to withhold 20% for federal income tax, so if your balance is $100,000, you receive a check for $80,000 and the plan sends $20,000 to the IRS. You then have 60 calendar days to deposit the full $100,000 into your Fidelity IRA. If you deposit only the $80,000 you received, the $20,000 withheld is treated as a distribution — you owe income tax on it and a 10% early withdrawal penalty if you're under 59½, even though you didn't actually receive that money.

Most people choose a direct rollover because it's faster, avoids the withholding tax, and eliminates the risk of missing the 60-day deadline.

Open a Fidelity IRA if you don't already have one

You need a Fidelity IRA open before the rollover can be completed. You can open one online at Fidelity's website in about 10 minutes by providing your name, Social Security number, date of birth, and address. Choose whether you want a Traditional IRA (for pre-tax money from your 401(k)) or a Roth IRA (which requires you to pay taxes on the amount you convert).

Most people roll into a Traditional IRA because it preserves the tax-deferred status of the money. A Roth conversion is a separate decision and involves paying income tax on the converted amount in the year of the rollover.

Request the rollover from your old plan administrator

Contact your former employer's plan administrator or the company that manages the plan (often a large financial services firm like Vanguard, Fidelity, Charles Schwab, or Merrill Lynch). You can find the administrator's contact information on your last 401(k) statement or by calling your former employer's benefits department.

Tell them you want to do a direct rollover to a Fidelity IRA. They will ask for your Fidelity IRA account number and the Fidelity account registration (your name and address as it appears on the IRA). You can find your Fidelity IRA account number by logging into your Fidelity account online or calling Fidelity at 1-800-343-3548.

The plan administrator will send you a form to sign authorizing the rollover. Some plans allow you to request a rollover online through their website. Once you submit the request, the plan administrator typically processes it within 5 to 10 business days.

Track the transfer and confirm receipt at Fidelity

After you submit the rollover request, ask your old plan administrator for a confirmation number and an estimated delivery date. The funds typically arrive at Fidelity within 7 to 14 business days after the plan sends them, though this varies by plan and by whether the transfer is electronic or by check.

Log into your Fidelity account online or call 1-800-343-3548 to confirm the funds have arrived. Fidelity will credit the money to your IRA and send you a confirmation statement. Once the funds are in your Fidelity IRA, they are invested according to your instructions — if you don't choose an investment, Fidelity may hold the money in a money market fund temporarily.

Keep copies of all correspondence with your old plan administrator and Fidelity for your records, including the rollover request form, confirmation numbers, and deposit confirmations.

Understand the tax and penalty rules for rollovers

A direct rollover is not a taxable event — you don't owe income tax on the amount rolled over, and it doesn't count toward your annual IRA contribution limit. The money retains its tax-deferred status in your Fidelity IRA.

An indirect rollover is also not taxable if you complete it within 60 days, but the 20% withholding is treated as a tax payment on your tax return. If you miss the 60-day deadline, the entire amount becomes a taxable distribution. If you're under 59½, you also owe a 10% early withdrawal penalty on the amount not rolled over.

You can roll over a 401(k) to an IRA only once per year per IRA. This rule applies separately to each IRA you own, but if you have multiple IRAs, the limit is one rollover per 12-month period across all of them. Direct rollovers do not count toward this limit — only indirect rollovers do.

Frequently Asked Questions

Can I roll over my 401(k) while I'm still working?

Most plans don't allow rollovers until you leave your job. Some plans permit "in-service" rollovers if you've reached age 59½. Check your plan's summary plan description or call your plan administrator to find out whether your plan allows early rollovers.

What if my old plan administrator is slow to process the rollover?

If you requested a direct rollover, delays on the plan's end don't affect you — the 60-day clock doesn't start until you receive the money. If you received an indirect rollover check, the 60-day deadline starts the day you receive it, regardless of how long the plan took to send it. Contact your old plan administrator if more than two weeks have passed since you submitted the request.

Can I roll over my 401(k) to a Roth IRA?

Yes, but it's a conversion, not a simple rollover. You'll owe income tax on the entire amount converted in the year of the conversion. You can do this with a direct rollover to a Roth IRA, but Fidelity or a tax professional can explain the tax consequences before you proceed.

What happens to the 20% withholding in an indirect rollover?

The 20% withheld is sent to the IRS as a tax payment on your behalf. When you file your tax return, it's credited against your tax liability. If you don't roll over the full amount (including the withheld 20%) within 60 days, the withheld amount is treated as a distribution and you owe tax on it.

Can I roll over my 401(k) to a Fidelity brokerage account instead of an IRA?

No. Rollovers must go into an IRA or another employer-sponsored retirement plan. A regular brokerage account doesn't have the same tax protections. If you want to move money to a brokerage account, you'd have to take a distribution (which is taxable) rather than a rollover.