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Fidelity offering up to a 10% IRA contribution match
Old 01-20-2016, 03:32 PM   #1
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Fidelity offering up to a 10% IRA contribution match

You have to open a new account and transfer a substantial balance ($500K) to get the 10% match on new contributions. You can still qualify for lower matching % with smaller balance transfers. I'm not sure it's worth the trouble, but hey, free money (just so long as you don't end up giving it all back to Fidelity in higher cost funds.)


https://rewards.fidelity.com/offers/iramatch
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Old 01-20-2016, 03:45 PM   #2
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The match is capped to $1,950 on my reading of the offer at the linked page.

Getting a $50,000 match for moving an IRA seemed to good to be true and thus is IMHO.

-gauss
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Old 01-20-2016, 03:45 PM   #3
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You are misreading it. They don't give you 10% on the amount transferred. If you transfer $500k or more then they give you a match of 10% of additional contributions so the most you can get in 2016 would be $650 or 0.13% of the total of $506,500.

Not appealing to me.
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Old 01-20-2016, 03:50 PM   #4
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Originally Posted by pb4uski View Post
You are misreading it.
I didn't misread it. Matches are always on new contributions. Sorry that wasn't clear in my quick description (now fixed).
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Old 01-20-2016, 03:53 PM   #5
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Does the 10% bonus wind up in the IRA? If so, IMO that's playing tricks with the annual contrib max, and is a slippery slope. If legal, what's to stop an investment firm from offering, "For each $1000 in 'fees' you pay us we'll put a $900 bonus in your Roth IRA!"
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Old 01-20-2016, 03:59 PM   #6
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Originally Posted by GrayHare View Post
Does the 10% bonus wind up in the IRA? If so, IMO that's playing tricks with the annual contrib max, and is a slippery slope. If legal, what's to stop an investment firm from offering, "For each $1000 in 'fees' you pay us we'll put a $900 bonus in your Roth IRA!"
I think the match winds up in the IRA, although I haven't seen anything that specifically says that.

Regarding the slippery slope, I don't see any logical difference between a Fidelity IRA match and an employer 401(k) match. Legal difference may be a different matter as they're not always logical.
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Old 01-20-2016, 04:16 PM   #7
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I didn't misread it. Matches are always on new contributions. Sorry that wasn't clear in my quick description (now fixed).
Ok, I stand corrected... you didn't misread it... you just initially mis-described it. My mind reading skills are off today.

Thanks for the clarification and fixing the OP. In any event, it isn't all that compelling an offer IMO.
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Old 01-20-2016, 04:22 PM   #8
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I can understand why mind-reading skills might be off today. I just caught up, some of these threads (not this one) just get funnier as the day proceeds. I'm waiting for Renfield to show up!
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Old 01-20-2016, 04:29 PM   #9
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Ok, I stand corrected... you didn't misread it... you just initially mis-described it.
Or you mis-read it.
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Old 01-20-2016, 06:00 PM   #10
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These deals always bother me. The existing clients are subsidizing the new. I say lower the er's for everyone.
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Old 01-20-2016, 06:46 PM   #11
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Rolled over my 401k in mid-Dec. Finalized in early Jan. There was/is bonus to roll over based on amount. $500k to $999k you get $1200 and amounts over $1MM is $2500. I already was a Fidelity customer, so only fresh (new) money qualified. Since I planned to do this already it was a no-brainer. Now the hard part - I am still sitting on all cash. FIDO advisor after 2 sessions has been very good to work with and had some good suggestions as to funds to allocate to. He wants me to execute the allocations based on what I told him I wanted (70/30). I have procrastinated to this point, and really am reluctant to jump until this carnage has worked through a bit more. I am not afraid of jumping at this point as I hold a longer term view and will likely begin DCA soon. I figure I am at least 12% ahead of the game. Opinions on strategy are welcome.
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Old 01-20-2016, 06:57 PM   #12
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The maximum IRA annual contribution for someone who is 50+ is $6500. So, for a $500K deposit, you get $650. Is there any guarantee that the offer continues to the next year and beyond? For retirees without earned income, no IRA contribution is possible anyway.

There are several brokerages that will give you $600 for just a $200K transfer. That would be a better deal.
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Old 01-20-2016, 10:01 PM   #13
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The maximum IRA annual contribution for someone who is 50+ is $6500. So, for a $500K deposit, you get $650. Is there any guarantee that the offer continues to the next year and beyond? For retirees without earned income, no IRA contribution is possible anyway.

There are several brokerages that will give you $600 for just a $200K transfer. That would be a better deal.
The deal FIDO is offering is good for three years so the maximum match is $1,950 . . . $650 * 3
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Old 01-20-2016, 11:34 PM   #14
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It seems like a small potato compare to what they are going to charge us. Thanks but no thanks.


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Old 01-21-2016, 07:35 AM   #15
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When I was planning to transfer my 401-k to an IRA, I calculated the cost difference for my portfolio to be 0.16% higher at Fidelity than at Vanguard. My portfolio is mostly in index funds and a tiny bit in one managed fund. Even that miniscule percentage difference meant annual losses exceeding $1000 compared to Vanguard. Extend that over a 40 year period and it made a measurable difference. The up-front bonus was meaningless from this perspective.
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