How To Roll Over A 401(k) To A Fidelity Traditional IRA

Short answer: Open a Fidelity Rollover IRA (or Roth IRA, if you’re rolling into a Roth), then ask your old 401(k) provider for a direct rollover — funds move institution-to-institution, with no taxes withheld and no deadline to worry about. If they can only send you a check, get it made payable to “Fidelity Management Trust Company (FMTC), FBO [Your Name]” and deposit it into your Fidelity IRA within 60 days to avoid taxes and penalties. It typically takes a few weeks from start to finish, and Fidelity doesn’t charge a fee to receive the rollover.

Looking to borrow instead of move your 401(k)? See our guide to Fidelity 401(k) loans and how borrowing works.

📰 In this Article

Direct Rollover vs. 60-Day (Indirect) Rollover

There are two ways to move your 401(k) to a Fidelity IRA, and the difference matters a lot:

	Direct Rollover	60-Day (Indirect) Rollover
How it works	Your old plan sends funds straight to Fidelity — by electronic transfer or a check made payable to Fidelity, not to you	Your old plan sends you a check made payable to you personally
Withholding	None	20% mandatory withholding, even if you plan to roll over the full amount
Deadline	None	60 days from the day you receive the check
Risk	Low	If you don’t replace the withheld 20% out of pocket and deposit the full original amount within 60 days, the shortfall counts as a taxable distribution — plus a 10% early withdrawal penalty if you’re under 59½

Because of the withholding trap, a direct rollover is almost always the better choice unless your old plan simply won’t do one.

Here’s why the 60-day version is a trap for the unwary: if you have $50,000 in your 401(k) and request an indirect rollover, your old plan is required to withhold 20% ($10,000) for taxes and send you a check for $40,000. To complete a full rollover and avoid tax on the difference, you have to deposit the entire original $50,000 into your IRA within 60 days — which means coming up with the missing $10,000 from your own pocket. You get the withheld amount back later as a tax credit when you file, but only after fronting the cash. A direct rollover skips this problem entirely because no money is withheld in the first place.

How to Roll Over a 401(k) to a Fidelity Traditional IRA (Step-by-Step)

Open your Fidelity Rollover IRA first. Go to Fidelity.com and open a Rollover IRA (a traditional IRA earmarked for rollover money) before you contact your old plan. You’ll need the new account number for the next step. If you have after-tax (non-deductible) contributions in your 401(k), you can split the rollover — pre-tax money to a traditional IRA, after-tax money to a Roth IRA.
Contact your old 401(k) provider and request a direct rollover. If your old plan was also at Fidelity, you can usually initiate this yourself through NetBenefits. With any other provider, call their rollover department and tell them you want a direct rollover to an IRA, not a distribution paid to you. Some providers may ask for a Letter of Acceptance from Fidelity confirming the receiving account is eligible — you can generate one from your Fidelity account or by calling Fidelity at 800-343-3548.
Give them Fidelity’s payee and account instructions. A check (even one your old plan mails to you to forward) should be made payable to: Fidelity Management Trust Company (FMTC), FBO [Your Name], with your new Fidelity IRA account number written on it. For an electronic/wire transfer, Fidelity’s rollover team can provide the receiving details and routing code (Fidelity uses the code DRC for direct rollover contributions).
Track the transfer. Direct rollovers commonly take a few days to a few weeks depending on how quickly your old provider processes it — ask them for a timeframe and put a follow-up reminder on your calendar a few days past it, since rollovers are easy for a former employer’s plan administrator to let slip.
Confirm the funds landed and invest them. A rollover IRA doesn’t invest itself — once the cash lands in your Fidelity account, it typically sits in a core money market position (like SPAXX) until you choose investments. Decide on your allocation and place trades, or set up recurring investments if you want it done automatically going forward.

What If My Old Plan Can Only Send Me a Check?

Expect 20% to be withheld automatically — this is required by the IRS on distributions paid directly to you from an employer plan, and there’s no way to opt out of it.
Deposit the check into your Fidelity IRA within 60 days of the date you receive it.
To avoid owing tax on the withheld 20%, you’ll need to deposit that amount too, from other funds, so the full original balance ends up in the IRA. You claim the withheld amount back as a credit when you file that year’s tax return.
Missing the 60-day window turns the distribution into taxable income for that year, and a 10% early withdrawal penalty applies if you’re under 59½. The IRS grants exceptions only in narrow circumstances — for example a financial institution’s error, a lost or misdirected check, or a serious illness or death in the family — and getting one typically requires self-certifying to the receiving institution or, in disputed cases, requesting a private letter ruling from the IRS.

Does a Rollover Count Against My Annual IRA Contribution Limit?

No. Rollovers are separate from annual contribution limits. You can roll over any amount from an old 401(k) and still make a full annual contribution to your IRA for the year, subject to the normal income and contribution rules.

Watch Out for the Pro-Rata Rule If You Ever Want a Backdoor Roth

This is the single most common mistake people make when rolling a 401(k) into a Fidelity traditional IRA: if you think you might want to do a backdoor Roth IRA in the future (a strategy for contributing to a Roth IRA despite earning too much to do so directly), rolling pre-tax 401(k) money into a traditional IRA can make that strategy much more expensive.

Here’s why: the IRS’s pro-rata rule treats all of your traditional IRAs as one combined pool when you convert any of it to a Roth. If your traditional IRA balance is a mix of pre-tax money (like a 401(k) rollover) and after-tax, nondeductible contributions, you can’t choose to convert only the after-tax portion tax-free — you have to convert that same pre-tax/after-tax ratio. A large pre-tax rollover balance means most of any future backdoor Roth conversion becomes taxable.

If a backdoor Roth is part of your plan, consider one of these instead:

Roll the 401(k) into your new employer’s 401(k) plan, if they accept incoming rollovers and offer investments you’re comfortable with — 401(k) balances aren’t included in the pro-rata calculation.
Roll the pre-tax money into a traditional IRA anyway and accept the pro-rata consequences, if the backdoor Roth strategy isn’t a priority for you.
Talk to a tax professional before you initiate the rollover — this is a decision that’s hard to undo once the money is in the IRA.

What Should I Invest In After the Rollover?

Fidelity’s ZERO index funds (like FZROX and FNILX) charge no expense ratio and track broad market indexes. Fidelity offers them at no cost as a way to attract and retain assets; they’re legitimate, full-featured funds, not a bait-and-switch.
For a simple, low-cost, diversified portfolio, many investors stick to a small number of total-market index funds — for example a U.S. total market fund (like FSKAX or FZROX) paired with an international fund (like FSPSX or FZILX) — rather than trying to pick individual stocks with rollover money.
Whatever you choose, your rollover IRA holds cash in a core position like SPAXX until you place trades — the money isn’t automatically invested for you.

This isn’t personalized investment advice — Fidelity’s own retirement specialists (800-343-3548) or a fee-only financial advisor can help you match a portfolio to your timeline and risk tolerance.

Frequently Asked Questions

What does “FMTC” mean on my rollover check instructions?

FMTC stands for Fidelity Management Trust Company, the custodian entity Fidelity uses to hold IRA assets. A rollover check should be made payable to “Fidelity Management Trust Company (FMTC), FBO [Your Name]” with your Fidelity account number included, not to Fidelity Investments or to you personally.

Is there a fee to roll over a 401(k) to Fidelity?

Fidelity doesn’t charge a fee to receive a rollover or to open a Rollover IRA. Your old 401(k) provider may charge its own distribution or account-closure fee — check with them directly, since this varies by plan.

How long does a 401(k) rollover to Fidelity take?

It varies by your old plan’s process, but a direct rollover commonly takes anywhere from a few business days to several weeks. Ask your old provider for their typical timeframe and follow up if you haven’t seen the funds by then.

Can I roll over a Roth 401(k) to a Fidelity Roth IRA?

Yes. Roth 401(k) contributions and earnings roll over to a Roth IRA, and pre-tax 401(k) money rolls over to a traditional IRA. If your 401(k) has both, ask your old plan to split the direct rollover between a Fidelity Roth IRA and a Fidelity traditional/rollover IRA.

Do I owe taxes on a direct rollover?

Not if you roll pre-tax 401(k) money into a traditional IRA (or Roth 401(k) money into a Roth IRA) — that’s a tax-free transfer between accounts with the same tax treatment. You would owe income tax if you roll pre-tax money into a Roth IRA, since that’s treated as a Roth conversion.

What happens to my old 401(k) account after the rollover?

Once the balance is fully transferred, your old plan typically closes the account or reduces it to a zero balance. You’ll usually get a confirmation from your old provider, and Fidelity will show the funds landing in your new IRA.

Sources: Fidelity, 401(k) rollover to IRA steps; Fidelity, The 60-day rollover rule; Fidelity, What is a backdoor Roth IRA?; IRS, Rollovers of retirement plan and IRA distributions. Updated September 2026.