401k Investment Transfer Question - Simple I Think!

[Drake3287]

Question on how to exchange a 401k investment including balance to a new fund. My retired wife has a Fidelity 401k plan and she'd like to roll the entire amount into a more conservative fund with less risk. Being retired she no longer contributes to this account nor have we needed to access any of the funds yet.

When I go online to exchange this fund and balance for a new one it's uses the term "sell" and "buy" for the new fund she'd like to get into.

Is this just a play on words meaning she's simply transferring the money into the new fund? I'd hate to accidentally "sell" her balance and fine ourselves with a check in the mail for this huge amount by mistake!

When I did a similar thing with my 401k (different company) plan they didn't use the term "sell", simply transfer. Am I simply over thinking this process?

Thanks for any comments.

 

[bingybear]

first.. talk to fidelity representatives directly... they are human.

If I understand you ... you are selling one asset in the given 401k and using the proceeds to purchase another investment in the same 401k.

you do not want to take assets out of the 401k or move the 401k to a different custodian

If you are changing only part of the holding partially then you would need to indicate that info.

 

[SecondCor521]

Unless you specifically ask Fidelity to withdraw money from your 401(k), I would certainly expect "sell" to mean sell the investment but leave the proceeds in cash inside the 401(k). Once the trade for the "sell" side settles (used to be 3 days, may be sooner now but I don't think so), then you can go in and do the "buy" transaction using the cash inside the 401(k) to buy the more conservative fund.

In some places, you can do an "exchange", which does the "sell" and "buy" transactions in one step. You might look around to see if that option is available on their website.

An actual withdrawal from your 401(k) would be a different animal, and would be obvious as they would probably warn you that it was a taxable event and probably bringing up options for federal income tax withholding.

 

[FI FELLOW]

In Fidelity NetBenefits,

1. Choose the 401K account if you have multiple accounts.
2. Scroll down to Holdings and select Make Changes.
3. Select Exchange One Investment.
4. Select investment to to Sell.
5. Select investment to Buy.
6. Submit the exchange.
7. It will be executed at close of trading that day.

 

[meierlde]

Question on how to exchange a 401k investment including balance to a new fund. My retired wife has a Fidelity 401k plan and she'd like to roll the entire amount into a more conservative fund with less risk. Being retired she no longer contributes to this account nor have we needed to access any of the funds yet.

When I go online to exchange this fund and balance for a new one it's uses the term "sell" and "buy" for the new fund she'd like to get into.

Is this just a play on words meaning she's simply transferring the money into the new fund? I'd hate to accidentally "sell" her balance and fine ourselves with a check in the mail for this huge amount by mistake!

When I did a similar thing with my 401k (different company) plan they didn't use the term "sell", simply transfer. Am I simply over thinking this process?

Thanks for any comments.

In this context sell means to convert the proceeds to cash and put them into the default sweep account (where dividends are put) then take the proceeds from this account to buy the new ones.

A more general question, since she is retired why not move the account to a rollover IRA which means you can make any investment not just the ones the employeer sponsor likes. If you go fidelity 401k to ira it will likley be almost painless as a single call may do it, (I did this at vanguard, when my ex employer decided to move its 401ks to fidelity. Since I had money at Vanguard outside the 401k. Or if she has annother brokerage account elsewhere you could move it there. By going to a self directed IRA you avoid an investment restrictions the old employer might have in place and any mutual fund stock or etf is in general available to buy/sell.

 

[Drake3287]

Thanks everyone. Your responses we're basically what I thought. As you can probably tell we haven't made many changes online to our 401k over the years. Luckily we've done fairly well only half knowing what we were doing!