believe it or not in the US there's more than 7.7 billion dollars in unclaimed
retirement savings floating out there that's why rolling over your old 401 K
to a fidelity rollover IRA is a very good idea why not simplify your finances
and just keep it all in one place you know how it is out of sight out of mind
if you leave old 401 K s lying around at old jobs you might forget about it
plus having old accounts lying around at previous jobs is kind of like leaving
your stuff at your ex's house after you've broken up with them like why
would you do that why nine times out of ten there's really no reason not to
rollover your 401 K after you've left a job many 401 k plans charge really high
admin fees they offer very limited investing options and if for whatever
reason your old employer goes bankrupt it can be a nightmare to track down that
money that is why I'm a big fan of rolling over your 401 K to fidelity with
their rollover IRA so in this video I'm gonna talk about how to do a fidelity
401k rollover step by step and for those of you who have a Roth 401 K 2 rollover
I'll also explain how that works as well and finally I'm gonna talk about how to
invest your fidelity rollover IRA once that 401k money has transferred over we
have a lot to cover in this video so just smash the like button and let's get
right into it for those of you that haven't already done the rollover I'm
going to walk you through how to do it step by step but for those of you who
have already done this step and your rollover is already done you can just
skip ahead to this timestamp of the video where I talk about three ways to
invest your fidelity rollover IRA the first step is to find out where all your
money is so if you think you may have 401 K s-- floating around somewhere but
you're not sure then I want you to contact the HR department at your old
job and find out what's going on or if you actually know who the 401 K provider
was you can just call them for example my old 401 K was serviced by it by
Vanguard so I knew exactly who to call when I wanted to roll it over okay and
the next step is to open that fidelity rollover IRA this is pretty easy to do
you just go to the fidelity website you click open
account and you select rollover IRA this is if you're rolling over a regular 401k
if you're rolling over a Roth 401k you would need to open a Roth IRA not
rollover IRA I know that rolling over a Roth 401k is still a rollover IRA but
the languaging is a little bit confusing if you're rolling over your Roth 401k
you need to open a Roth IRA not a rollover IRA at least that's the way
it's done at fidelity if you're rolling over regular 401k money and Roth 401k
money then you would need to open both you need to open a rollover IRA and a
Roth IRA basically what we're doing here is we're opening the destination
accounts for your 401k money the new home and the destination account has to
match the type of 401k so a traditional 401k needs to get rolled into a
traditional rollover IRA and a Roth 401k needs to get rolled over into a Roth IRA
got it once you finish the IRA account opening process fidelity will take it to
a confirmation page with the account number of your new IRA so write down
this account number because you're going to need it for the next step the next
step is to contact your 401k provider and tell them to send your 401k money to
your new fidelity IRA for your 401k provider to do that you need to tell
them three pieces of information one who to make the check payable to to the
account number of your new fidelity IRA and then three the mailing address where
they need to send out that check to get this information just Google fidelity
rollover 401k deposit go to the top search result and you'll find fidelities
instructions on everything you need to tell your 401k provider so that they
send the funds to the correct place make sure your 401k provider makes the check
payable to fidelity management trust company FBO your name and then tell them
to include your IRA account number on the memo line and just to be clear if
you have both 401k and Roth 401k money to roll over then you need to do this
whole process twice two different IRAs two different checks the final step is
to make sure you report the rollover correctly when you file your taxes so
your 401k provider is gonna send you a form 1099 showing that you took money
out of the 401k and infidelity we'll send you a form 5498 showing that you
contributed money into an IRA the end result is that those amounts cancel each
other out so that you won't owe any taxes and that's what makes it a
rollover make sure you file both of these forms the year that you do the
rollover form 1099 and form 5498 so that you don't run into any problems with the
IRS if you get stuck anywhere during this process just pick up the phone and
call fidelity believe me they are very happy to have you transfer your 401k
money to them so they'll spend as much time on the phone with you as you as you
need also if you could use a helpful and very complete guide on how all of these
different retirement accounts work they don't load my ultimate guide to IRAs
401ks and HSAs it's a neat little cheat sheet that summarizes the pros and cons
of each account what you can and can't do with each and which ones to
prioritize and why it literally has everything you need to know about tax
advantaged accounts so click the link below to download it and finally for
some ideas on how to invest your fidelity rollover IRA so your your IRA
just to clarify is not an investment it's just an account with money in it so
even if your 401k had investments in it they'll liquidate everything when you
roll it over and then until you pull the trigger on your new IRA and actually buy
some investments with that money your IRA is just gonna sit and cash that's
why I want to suggest three ways to invest your rollover IRA the first and
easiest way to invest is by buying a target date fund target date funds also
known as lifecycle funds are mutual funds that target a specific date for
retirement and they're actually a fund of funds in that they are funds that
usually contain anywhere from three to five different index funds inside it
every target date fund has a year at the end of its name like the fidelity
freedom index 20:55 or the
and guard target retirement 2055 fund or the Schwab target 2055 index funds and
depending on your target retirement year the fund will choose the appropriate mix
of stocks and bonds for your age I actually made a video about target date
funds a few weeks ago so definitely check that out if you want to go more in
depth target date funds are nice because you don't have to think too much all you
have to do is figure out what year you're planning to retire by a target
date fund with that year and then you can just sit back and relax a lot of
people retire millionaires by putting their money into target date funds every
month and doing nothing else so it's a pretty decent option for busy people in
fact your 401k was probably invested in a target date fund before you rolled it
over to fidelity because target date funds are actually the default
investment option for most 401ks the second option is to invest your rollover
IRA into index funds this is much more DIY than buying a target date fund
because you're the one making all the decisions for your portfolio it's a lot
more hands-on because to invest in target date funds all you do is just buy
one fund you just find a low-cost fund with your target year you buy it and you
just let the fund do the rest of the work literally until you retire it's
basically a one and done thing however investing in index funds is a more
involved process because first of all you have to decide what allocation you
want in other words what percentage of stocks versus bonds versus cash that you
want in your portfolio then you need to research which index funds to buy to fit
that asset allocation and not only this but you'd also have to do some ongoing
maintenance such as rebalancing your portfolio when the market moves and also
adjusting your allocation as you approach retirement age there's
thousands of index funds out there and there's a lot of nuances to take into
consideration so it definitely takes a good amount of knowledge and effort to
invest this way I mean once you set it up it's not that hard but it does take a
little bit of time and after to set it up lucky for you I actually have a video
on how to set up and in fund portfolio it's right here so check
it out for some step-by-step guidance I actually like investing this way because
even though it's a little more work than buying target-date funds I like it
because I get to be more hands-on with my money and I like that besides the
hardest part about investing in index funds is just setting it all up like I
said once it's set up it really only takes about an hour of your time every
couple of months if that and the third way to invest your fidelity rollover IRA
is to buy individual stocks buying individual stocks is very different from
the first two options that we talked about because when you invest in a
target date fund or in index funds you're gonna own a lot of different
stocks you're gonna own a piece of the entire market because most index funds
contain hundreds if not thousands of different stocks so when you're
investing in an index fund or index funds via target date funds you're
betting that the stock market as a whole will go up but when you invest in
individual stocks or stocks of specific companies then you're betting that that
one company is going to do well so that's a very different game to play
because then you have to know all the details about that one company you'd
have to look at financial statements assess the management team and study the
industry and business model of that company and you're really zooming in on
the prospects of one company versus the entire stock market so it's investing on
a micro level versus on a macro level as you can imagine there is a lot that goes
into finding good stocks so it's definitely not something you can learn
how to do overnight but if you are interested in learning more about it I
linked it to two really awesome books on the topic in the description box below
to be perfectly honest most people would be better off with the first two options
investing in target-date funds or in index funds they're easy enough that you
can wrap your head around it and get your rollover IRA invested today because
buying index funds is just so much easier than picking stocks so that wraps
up this video I hope that it's helped you feel super confident about your
fidelity rollover IRA thank you so much for spending this time with me I
appreciate you I appreciate you I appreciate you I post new videos every
Wednesday so I'll see you next week same time same place
meanwhile don't forget to grab my free PDF resource the ultimate guide to IRAs
401ks and HSAs by clicking the link below in the video description I know
you're gonna love it remember to invest early and often and
to boldly and courageously go after the life that you want I'll talk to you
again soon