Rolling over a Fidelity 401(k) to a Vanguard IRA takes about two to four weeks and can be done almost entirely online. The process involves opening a Vanguard IRA, requesting a distribution from Fidelity, and getting the funds deposited into your new account. Here’s how to handle each step so your money moves smoothly and you avoid unnecessary taxes.
Open a Vanguard Rollover IRA First
Before you touch anything at Fidelity, set up the destination account at Vanguard. Go to Vanguard’s website and open a rollover IRA. You’ll choose between a traditional IRA and a Roth IRA based on what type of 401(k) contributions you’re rolling over. Pre-tax 401(k) money goes into a traditional IRA. Roth 401(k) money goes into a Roth IRA. If you have both types, you’ll need both accounts.
Once your Vanguard IRA is open, write down the account number. You’ll need it when you request the distribution from Fidelity and again when mailing any checks.
Request the Distribution From Fidelity
If your 401(k) is held through Fidelity’s workplace platform (NetBenefits), you can initiate the rollover entirely online without additional paperwork. Log in to NetBenefits, navigate to your plan, and look for the withdrawal or rollover option. Select a direct rollover to an external IRA, and provide your Vanguard account details when prompted.
If you run into issues or have company stock in the plan, call Fidelity at 800-343-3548. A representative can walk you through the process and help you avoid missteps with appreciated employer stock, which has special tax treatment worth understanding before you move it.
One important detail: make sure you request a direct rollover, not a cash distribution. With a direct rollover, Fidelity sends the money straight to Vanguard (or issues a check payable to Vanguard on your behalf). No taxes are withheld, and you don’t have a deadline to worry about. If Fidelity instead cuts the check payable to you personally, they’re required to withhold 20% for federal taxes. You’d then need to come up with that 20% from your own pocket and deposit the full original amount into your Vanguard IRA within 60 days to avoid owing income tax and a potential 10% early withdrawal penalty on the shortfall.
How the Money Gets to Vanguard
Direct rollovers from a 401(k) typically arrive at Vanguard as a check rather than an electronic transfer. Fidelity will issue a check made payable to Vanguard for the benefit of you (the format is usually “Vanguard FBO [Your Name]”). In some cases, Fidelity mails this check directly to Vanguard. In others, they mail it to you, and you forward it.
If the check comes to you first, don’t endorse it. Write your Vanguard IRA account number on it and mail it to Vanguard at one of these addresses:
- U.S. Mail: Vanguard, P.O. Box 982901, El Paso, TX 79998-2901
- FedEx, UPS, or other couriers: Vanguard, 5951 Luckett Court, Suite A1, El Paso, TX 79932-1882
If the check is made payable to you instead of Vanguard (meaning this became an indirect rollover), endorse it, include your Vanguard account number, and mail it to the same address. Remember the 60-day clock starts the moment you receive it.
What It Costs
Fidelity charges no fee to close an IRA and no fee to transfer an account out. Your 401(k) plan, however, is governed by your employer’s plan rules, not Fidelity’s retail pricing. Some employer plans charge a small distribution or processing fee, typically in the range of $25 to $75. Check your plan’s fee disclosure document or call Fidelity to confirm whether your specific plan charges anything.
On the Vanguard side, there’s no fee to receive a rollover. However, you’ll need to meet fund minimums when you invest the money. Vanguard’s mutual funds generally require $1,000 to $3,000 for Investor Shares and $3,000 or more for Admiral Shares, which carry lower expense ratios. Vanguard ETFs have no minimum beyond the price of a single share, making them a flexible option if your rollover balance is modest.
Investing the Funds After They Arrive
Once Vanguard processes your rollover check, the money lands in your IRA’s settlement fund, which is a money market fund. It won’t be invested in stocks or bonds automatically. Log in to your Vanguard account, and you’ll see the cash balance available to invest. From there, you choose your funds. If you’re not sure what to pick, Vanguard’s target-date retirement funds are a straightforward single-fund option that adjusts its stock and bond mix based on when you plan to retire.
Don’t let the money sit in the settlement fund indefinitely. Uninvested cash earns very little compared to a diversified portfolio, and the whole point of the rollover is to keep your retirement savings growing.
Timeline From Start to Finish
Most rollovers from a 401(k) to an IRA take two to four weeks. The biggest variable is how quickly Fidelity processes your distribution request and issues the check. Some plans process requests within a few business days, while others batch distributions on a specific schedule. If the check routes through you rather than going directly to Vanguard, add a few days for mail time. Once Vanguard receives and processes the check, the funds typically appear in your settlement account within one to three business days.
You can speed things up slightly by using a courier service instead of regular mail when forwarding the check. Calling Fidelity to confirm your distribution has been initiated, and then following up if you haven’t received or tracked a check within 10 business days, helps catch delays early.
Roth 401(k) Rollovers Need Extra Attention
If part or all of your Fidelity 401(k) is in a Roth account, those dollars must roll into a Roth IRA at Vanguard, not a traditional IRA. Mixing them into a traditional IRA would create a tax mess. When you request the distribution from Fidelity, make sure the Roth portion is directed separately to your Vanguard Roth IRA. Your Fidelity plan should track your Roth and pre-tax balances independently, and the rollover paperwork will typically reflect this split. Confirm with Fidelity that each portion is going to the correct account type before anything is mailed.