Transferring your 401k might feel intimidating, but if you’re looking to consolidate accounts or explore a different investment platform, moving your funds from Fidelity to Betterment is a straightforward process — as long as you follow the correct steps.
At Carry, we want to make financial decisions feel more manageable — even if you’re handling them outside our platform. This guide walks you through what to prepare, how to avoid tax issues, and what to expect along the way.
Quick Transfer Checklist
Before starting your transfer, make sure you have the following ready:
✅ Your Fidelity 401k account number
✅ A valid government-issued photo ID
✅ Your most recent 401k account statement
✅ Matching personal information on both Fidelity and Betterment accounts
✅ Bank account details for verification
✅ Separate forms for Roth and traditional portions if applicable
✅ Contact information for both Fidelity and Betterment support teams
✅ An expectation of 5–10 business days of processing time
Step 1: Evaluate Your Current 401k and Transfer Goals
Before initiating any transfer, take a moment to ensure that transferring your 401k aligns with your long-term financial goals. Review your current investments at Fidelity and assess whether Betterment’s platform offers what you’re looking for in terms of asset allocation, automation, or cost savings.
✅ Review your current 401k account performance
✅ Assess and compare if Betterment meets your long-term needs
✅ Confirm you’re eligible to transfer or roll over the account
Step 2: Request a Direct Rollover
A direct rollover is the best way to move your 401k funds without triggering taxes. This means Fidelity sends your retirement funds straight to Betterment — you never receive the money directly, which helps you avoid tax withholding and early withdrawal penalties.
✅ Call Fidelity and request a direct (e.g., trustee to trustee) rollover
✅ Notify Betterment so their rollover team can guide you through the process
✅ Confirm account details, including account type (401k rollover) and recipient account
Step 3: Gather the Required Documents
Having your documents ready can help prevent delays in processing.
✅ Your Fidelity 401k account number
✅ Government-issued photo ID (e.g., driver’s license or passport)
✅ Most recent 401k statement
✅ Matching personal details (name, address, SSN) across both accounts
✅ Bank account info (if Betterment needs verification)
Step 4: Handle Roth and Traditional Funds Separately
If your 401k includes both traditional and Roth contributions, you’ll need to manage each segment independently. This preserves the tax advantages for each part and avoids confusion during the rollover process.
✏️ Hypothetical Example: If you have $50,000 in traditional and $10,000 in Roth funds, Betterment will need separate documentation for each. These are treated as two individual transfers.
✅ Identify which portion is traditional vs Roth
✅ Submit two sets of transfer instructions if needed
📝 Important Note: Always double-check with both providers on how to label and route each account type
Step 5: Know the Timeline and Processing Expectations
Most 401k rollovers take 5–10 business days, depending on both providers’ processing speeds and how complete your paperwork is. Your funds may be temporarily unavailable during this time, so plan accordingly.
✅ Plan for 1–2 weeks of processing
✅ Avoid scheduling trades or rebalancing during this window
❌ Delays can happen if forms are incomplete or mismatched
📝 Important Note: Ask both providers about trading restrictions during the rollover
Step 6: Understand the Cost and Fee Differences
Fidelity typically does not charge fees for 401k rollovers. Betterment also does not charge a fee for incoming transfers; however, standard account management fees (either $4 per month or 0.25% annually) may apply after the transfer is complete.
However, it’s still smart to confirm current policies, and make sure you understand the ongoing fees you may face with your new Betterment account.
✅ Check if Fidelity has any final transaction or account closure fees
✅ Review Betterment’s account management fees
❌ Don’t assume fee structures are identical — compare ongoing costs
Step 7: Avoid Tax Consequences
When done correctly, a direct rollover protects your retirement savings from being taxed. It’s essential that the funds move between providers without ever hitting your personal bank account.
✏️ Hypothetical Example: If you receive the rollover check personally, the IRS may withhold 20% for taxes. That’s why it’s critical to request the funds be sent directly to Betterment.
✅ Ensure the rollover is direct, not indirect
✅ Never deposit a rollover check into your personal bank account
✅ Confirm with both providers that the account type remains tax-deferred
Step 8: Final Verification and Account Check
Once the transfer is complete, log into your Betterment account to confirm all funds have arrived. Double-check that your account details match, your fund allocations are correct, and no errors occurred during the process.
✅ Confirm the final balance and investment allocations
✅ Verify all personal and account information
✅ Update any missing or outdated beneficiary info
Wrapping Up Your 401k Transfer Journey
Transferring your 401k from Fidelity to Betterment doesn’t have to be complicated. By choosing a direct rollover, staying organized, and closely monitoring each step, you can move your retirement savings without disrupting your long-term plan.
✅ Confirm your transfer goals and eligibility
✅ Complete the direct rollover request
✅ Monitor the transfer process until funds arrive
✅ Verify the account type, balances, and beneficiary details once complete
Take your time, follow each provider’s instructions, and don’t hesitate to contact customer support if you need help — they’re there to assist you every step of the way.
📌 If you’re looking for more guidance, these resources may help:
Comprehensive 401k Rollover Guide
IRS | Rollovers of retirement plan and IRA distributions
Disclaimer:
The Carry Learning Center is operated by The Vibes Company Inc. (“Vibes”) and contains generalized educational content about personal finance topics. While Vibes provides educational content and technology services, all investment advisory services discussed on this website are provided exclusively through its wholly-owned subsidiary, Carry Advisors LLC (“Carry Advisors”), an SEC registered investment adviser. The information contained on the Carry Learning Center should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or engage in a particular investment, accounting, tax or legal strategy. Vibes is not providing tax, legal, accounting, or investment advice. You should consult with qualified tax, legal, accounting, and investment professionals regarding your specific situation.
The accounts, strategies and/or investments discussed in this material may not be suitable for all investors. All investments involve the risk of loss, and past performance does not guarantee future results. Investment growth or profit is never a guarantee. All statements and opinions included on the Carry Learning Center are intended to be current as of the date of publication but are subject to change without notice.
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