When you’re considering rolling over your 401(k) to an IRA, know that you have options. Opening a 401(k) at one financial institution doesn’t mean you have to stick with the same institution for your rollover. Even if you already have an IRA, you can move that to a different financial institution, as well.
You have the option to rollover your 401(k) to an IRA at a different institution. As long as you follow the guidelines – like putting that money into the new investment account within 60 days – you can move that money penalty-free.
For the purpose of this article, we’re going to look at the two most common financial institutions that people use to open a 401(k) or IRA: Fidelity and Vanguard.
Here’s how you can make the switch:
- Set up an IRA at the institution you want. If you have a Fidelity 401(k) and plan to switch to Vanguard, you’ll first need to set up a new IRA at Vanguard. You can usually only do this when you leave your employer. Some exceptions can apply.
- Take care of the paperwork. Contact the company where you set up your 401k to get the appropriate form. This is usually called a “withdrawal form.” On the form, you will select “rollover to another institution,” or something similar.
- Verify with your current IRA how they would like to make the check payable. When you move your IRA, you will receive a check for the amount of money in your IRA. These checks will be made payable to different recipients depending on where you currently have your IRA. At Fidelity, they make this check payable to FMTC (Fidelity Management Trust Company.) At Vanguard, they make the check payable to VFTC (Vanguard Fiduciary Trust Company.) So a check from Vanguard might look something like this in the “to” field: VFTC FBO Sample Sam IRA.
- Send your check in with a deposit or rollover form. Fidelity and Vanguard will have separate paperwork to mail the check in with.
- Finally, you’ll put the check in the mail, and if there are no other issues, you will have moved your IRA to a new institution. Here are the mailing addresses for Fidelity and Vanguard:
Fidelity Mailing Address:
Fidelity Investments PO Box 770002 Cincinnati, OH 45277-0090
Vanguard Mailing Address:
Vanguard P.O. Box 1110 Valley Forge, PA 19482-1110
Do you need help preparing for retirement? Contact me today to set up a meeting to talk about your goals. You can also download my free ebook for physicians for tips and information about getting your finances on track.