Looking to switch IRA providers for better investment options or lower fees? If you’re moving your Traditional IRA from Fidelity to Betterment, knowing how to navigate the process correctly will help you avoid tax penalties and ensure your retirement savings stay on track.
At Carry, we want to make financial decisions feel more manageable — even if you’re handling them outside our platform. This step-by-step guide will walk you through the entire process so your transfer is smooth, efficient, and tax-free.
Quick Transfer Checklist
Before you start, make sure you have everything you’ll need:
✅ Fidelity Traditional IRA account number
✅ Government-issued photo ID
✅ Most recent IRA statement from Fidelity
✅ Social Security Number
✅ Betterment account information
✅ Contact details for both financial providers
Step 1: Plan Your Transfer
Start by reviewing your current IRA holdings to make sure a transfer aligns with your long-term retirement goals and check that your IRA account is eligible for a transfer.
✅ Review your current IRA account and investment allocations
✅ Confirm that both accounts are active and correctly labeled
✅ Consider market conditions and timing before making a transfer
Step 2: Use a Direct Transfer
The safest method for moving your IRA is through a direct transfer, also called a trustee-to-trustee transfer. With this approach, Fidelity sends your funds directly to Betterment without you ever taking possession of the money.
✅ Initiate the transfer through Betterment’s online platform
✅ Select “direct transfer” during the request
✅ Avoid receiving any funds personally
Step 3: Prepare Required Documents
To avoid delays or back-and-forth communication, make sure all required documents are accurate and that your information matches exactly across both accounts.
✅ Fidelity Traditional IRA account number
✅ Valid government-issued photo ID
✅ Most recent IRA account statement
✅ Social Security Number
✅ Betterment account details
Step 4: Review Transfer Compatibility
Not all investments in your IRA will transfer seamlessly. Certain assets — especially proprietary mutual funds — may need to be liquidated before the transfer, which could temporarily alter your portfolio’s composition.
✅ Check with both providers about investment compatibility
✅ Ask if any funds need to be sold before transfer
✅ Understand possible transaction fees or timing impacts
Step 5: Understand the Timeline
IRA transfers typically take 3 to 5 business weeks, depending on how quickly documents are reviewed and assets are verified. Complex portfolios may take longer to move completely.
✏️ Hypothetical Example: John submitted his transfer on May 1 and received full confirmation from Betterment by May 25 — a 3.5-week process from start to finish.
📝 Tip: Keep a folder with all communication and documents related to your transfer in case you need to reference them later.
Step 6: Confirm Transfer Fees
Most institutions don’t charge for direct IRA transfers, but certain account situations might result in small fees. Betterment has standard account management fees (either $4 per month or 0.25% annually) that may apply after the transfer is complete.
It’s always advisable to confirm the most current fee structures directly with both Fidelity and Betterment before initiating the transfer.
✅ Ask Fidelity about any exit, transaction, or liquidation fees
✅ Confirm with Betterment that there are no incoming account charges
✅ Review fees for any specific investment sales
Step 7: Avoid Tax Consequences
A direct transfer between Traditional IRAs is not a taxable event when executed properly. As long as the funds go directly from Fidelity to Betterment, you won’t trigger penalties or lose your tax-deferred benefits.
✏️ Hypothetical Example: If your Fidelity IRA is worth $50,000, you can transfer the full balance to Betterment without paying taxes — as long as it’s done correctly as a direct transfer.
✅ Do:
- Initiate a direct transfer
- Make sure the account types match (Traditional IRA to Traditional IRA)
- Follow provider guidelines precisely to avoid penalties
❌ Avoid:
- Receiving the money personally
- Depositing funds into a personal bank account
- Mixing account types (e.g., Traditional IRA into Roth IRA)
Step 8: Verify and Wrap It Up
Once the transfer is complete, review your new Betterment account to ensure everything moved correctly. Confirm the account balance, fund allocation, and that no funds were left behind at Fidelity.
✅ Log in to both accounts and verify the full balance was transferred
✅ Request confirmation or final statements
✅ Save copies of all completed documents for your records
Wrapping Up Your IRA Transfer Journey
Transferring your Traditional IRA from Fidelity to Betterment is a straightforward process that requires careful attention to detail. The key takeaways are simple: initiate a direct transfer to avoid potential tax penalties, ensure you have all necessary documentation, and understand that the entire process can typically take 3-4 weeks.
Your next steps should focus on:
✅ Gathering required account information
✅ Initiating the transfer through Betterment’s platform
✅ Verifying all transfer details with both financial institutions
Remember that while the transfer itself is typically tax-neutral, it’s crucial to follow each step precisely to maintain the tax-deferred status of your retirement funds.
📌 If you need any additional guidance, be sure to check out these related articles:
What Is A Traditional IRA? (Rules And Tax Benefits)
Traditional IRA Withdrawal Rules & Penalties Explained
IRS | Retirement plans FAQs regarding IRAs
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.
To access investment advisory services through Carry Advisors, you must be a client of Vibes on an eligible membership plan. For more information about Carry Advisors’ investment advisory services, please see our Form [ADV Part 2A] (https://files.adviserinfo.sec.gov/IAPD/Content/Common/crd_iapd_Brochure.aspx?BRCHR_VRSN_ID=916200) brochure and [Form CRS] (https://reports.adviserinfo.sec.gov/crs/crs_323620.pdf) or through the SEC’s website at [www.adviserinfo.sec.gov] (http://www.adviserinfo.sec.gov/).