I’m Being Charged $255 Just to Move My 401(k) to Fidelity—Is This Normal?

Brokerage firms charge various fees, and one of the common costs is an account transfer fee. Many companies charge to transfer a 401(k) plan from one firm to another. 

A Redditor came across this reality when planning to move a 401(k) to an Empower Premier IRA and then roll it into Fidelity. The individual posted in the Personal Finance subreddit about the fees and listed each of them.

These were the fees:

• A $95 termination/transfer fee to move the 401(k) to the Premier IRA
• Another $95 termination/transfer fee for moving the Premier IRA to Fidelity
• ACATS fee of $65

The Redditor wanted to know if these types of transactions were common and if there was a way to keep costs down. Redditors jumped into the comments to share their advice.

Ask Fidelity for a Reimbursement

One commenter suggested approaching Fidelity and asking them to reimburse the ACATS fee. It’s worth a shot, and the commenter has experience. The individual paid $75 to transfer an IRA from Empower to Schwab. Empower charged the fee, but Schwab reimbursed the fee. 

Someone responded to the comment saying that Fidelity reimburses transfer fees if you are moving more than $25,000. That makes sense since brokerage firms often reward people with better deals if they have higher account amounts. However, the commenter mentioned that Fidelity caps the reimbursement to $175.

These Types of Fees Are Normal

The top comment came from a Redditor who pretty much said that this is how the industry works. “They will take every opportunity to nickel and dime you,” the commenter stated.

While you might save some money if you find a brokerage firm that reimburses you, big firms like Fidelity and Schwab are often the answers. It’s better to accept the fee as a part of doing business and focus your efforts on other areas. Yes, it can be a bit frustrating, but being upset about it won’t solve the problem.

Some Redditors warned that Empower is a bad broker for keeping your 401(k) or IRA. Some people don’t have a choice since their employer may decide to use Empower for their retirement program. Unfortunately, there’s not much you can do about it. One commenter said that they moved the funds out of Empower to a Fidelity IRA only to discover that their new employer uses Empower for retirement accounts. The Redditor wasn’t pleased with this development.

It’s Not Enough to Get Upset About

One commenter understood the Redditor’s frustrations but said it’s not worth getting upset over $255. Yes, it’s better if the fees were zero, but $255 isn’t a life-changing amount of money. A decently sized portfolio can earn $255 in a single day if the market moves in your favor. 

Paying $255 won’t derail your long-term financial goals, and it’s not even a recurring expense. As time passes, you will forget about that $255 and focus on what you can do to build your nest egg.

Perhaps the Redditor just wanted to vent and get it off their chest. That’s perfectly acceptable. It’s okay to be upset when things don’t go your way financially, but you have to pick yourself up and look at the next thing you can do to improve your situation.