Individual IRAs
Compare Your Options

You have several choices when you retire or change jobs. You can move your assets into an IRA, roll your assets to a plan with your current employer, keep your assets in your former employer's plan, or take your distribution in cash (withdrawal penalties may apply).

At Fidelity, we believe that simplifying your finances is an important part of a sound financial strategy. By bringing your old 401(k)s and IRAs together, you can manage your retirement savings more efficiently.

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How to decide if a Rollover is right for you

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. Or, call 800-FIDELITY for a complimentary Retirement Review and get help understanding your options. We'll help you determine what may be appropriate for you, and give you the guidance you need to take the first steps.

Consolidate in an IRA if you want:¹
  • A more complete view of your financial picture, making it easier to maintain appropriate asset allocation
  • Freedom from restrictions that may be present in your workplace savings plan
  • Access to a full range of mutual funds, stocks, bonds, CDs, and other investments
  • The ability to withdraw penalty-free for a first-time home purchase or qualified education expenses
  • The opportunity to convert to a Roth IRA for some or all of your savings, regardless of income
Consolidate in a workplace savings plan (e.g., 401(k) plan) with your current employer if you:¹
  • Need additional asset protection from creditors
  • Will need to take a loan from this plan (if allowed by your employer)
  • Are over age 70½ and want to defer your required distributions
  • Invest in specially-priced or custom investment options or use managed money services in your plan (and the benefits of these options outweigh those of an IRA)
Leave your assets in your former employer's plan if you:¹
  • Stopped working for that employer by at least age 55 and are not yet 59½, need to withdraw funds for an immediate need, and don't want to incur an early withdrawal penalty
  • Take advantage of specially-priced or custom investment options or managed money services in your plan (and the benefits of these options outweigh those of an IRA)

"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, before age 59½, a 10% withdrawal penalty may apply, and your cash distribution will be subject to state and federal taxes.2 Of course, your money will also no longer have the potential to continue to grow tax-deferred.

Next Step

Call a Rollover Specialist at 1-800-FIDELITY for answers to your questions about IRAs or to begin the process.

  1. You should also consider the impact of Net Unrealized Appreciation (NUA) if you hold company stock in your workplace savings account.
  2. 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 is also subject to a 10% early withdrawal penalty, unless you qualify for an exception to this rule. The plan document and current tax laws and regulations will govern in case of a discrepancy. 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 adviser about your situation.

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