When you transfer your 401 (k) to a new tax-advantaged retirement account, there is generally no transfer fee. However, some financial institutions may take the opportunity to impose fees on customers, either when they invest money in a new IRA or when they withdraw money from their old IRA. Reinvesting an IRA can involve transferring money from an occupational retirement plan, such as a 401 (k) or 403 (b) plan, to an IRA or changing money from one IRA provider to another. Regardless of the specific type of reinvestment you make, the IRS doesn't require IRA providers to charge you fees.
Vanguard does not charge any processing fees for reinvestments. Depending on the investments you choose, there may be certain transaction or brokerage costs (which are kept as low as possible). A cumulative IRA is a convenient and flexible way to carry your old 401 (k) or other workplace retirement accounts with you when you change or leave a job. Within 60 days of receiving the distribution check, you must deposit the money into a cumulative IRA to avoid current income taxes.
In addition, transferring money from an old work plan to a cumulative Fidelity IRA is free of taxes or penalties. While transferring a 401 (k) plan to an IRA may seem like a good option to avoid immediate taxes and continue to increase your retirement savings when you leave a job, you should know how much you could pay in additional fees. One of the benefits of transferring a 401 (k) plan to an IRA is that you can have a greater choice of investments in an IRA. If you invest the money from your new accumulated IRA in mutual funds, be sure to check if they charge a sales burden.
With a wide range of investment options, a cumulative Fidelity IRA gives you the option of investing on your own or having Fidelity invest for you. However, when you turn 732, you'll need to withdraw a certain amount of money from your cumulative IRA each year, which is called the minimum required distribution (RMD). Open or use an existing Roth Fidelity IRA and keep in mind that transferring pre-tax money to a Roth IRA is a conversion to Roth and is a taxable event.
