Fidelity IRA Review 2024: Features, Fees, and More

Best If You Want

Fidelity offers a wide selection of low-cost investment options on an ultra-user-friendly online platform. They offer a variety of low-fee transactions including no-fee stock and ETF trades online, making them a good choice for cost-conscious investors. Fidelity equips customers with access to research that, while not as detailed as some competitors, is enough to help investors make educated investment decisions regarding retirement planning.

With $7.8 trillion in assets under management (AUM), Fidelity is the largest provider of retirement savings accounts in the US. Their size has allowed them to build a product that serves the needs of most Americans and has allowed them to build one of the best-tested and most user-friendly trading platforms available.

Fees

Self-directed retirement accounts typically carry two types of fees: annual account fees and transaction fees. Account fees are usually expressed as a percentage of your assets that are paid each year (e.g. .50% per annum). On the other hand, transaction fees are charged exclusively during trading. The cost of annual and transaction fees have decreased dramatically over the past decade, but are still an important consideration when deciding if a broker fits your needs.

At Fidelity, you’ll pay:

• No annual account fee
• No commissions on trades of stocks, ETFs, and options.
• $.65 per options contract, which is in line with the industry standard.

What You Can Invest In

Like with all self-directed accounts, choosing the investments in your retirement account is entirely up to you! You’ll select from a wide variety of investment options including stocks, ETFs, mutual funds, options, and bonds from Fidelity and others. The investment options available allow you to build a well-diversified portfolio at a low cost.

If you aren’t sure where to start, Fidelity’s retirement planning tools can help you develop an investment strategy that meets your needs. If you have questions, you’ll have 24/7 access to their customer support line.

Account Types

If you’re interested in setting up a Fidelity retirement savings account, they offer a wide range of account types, including taxable brokerage online trading accounts, and more. For the purposes of this review, we’ll focus on Fidelity’s IRA account offerings.

Traditional IRA

Traditional IRAs allow you to contribute pre-tax money to your retirement funds, which reduces your taxable compensation (and thus earns you a deduction) in the year the contributions are made. Investment earnings grow tax-deferred, and retirement withdrawals are taxed as regular income.

Roth IRA

A Roth IRA works in the opposite way to a traditional IRA: They’re funded with after-tax money, which means you won’t get a deduction in the short term, but your contributions see tax-free growth potential and, provided all the rules are followed, can be withdrawn tax-free come retirement time, as well.

401(k) Rollover IRA

Fidelity also provides a rollover IRA that’s perfect for catching the funds from your old 401(k). Not sure how to do a 401(k) rollover? Capitalize is here to help!

Other Features

As one of the largest brokers in the country, Fidelity offers a wide selection of investments including annuities and 529 plans. In addition, investing at Fidelity means you may be eligible for other benefits, such as a Fidelity Rewards Signature Visa card. The Signature Visa card comes with a $0 annual fee and can help you earn up to 2% cash back, which can be deposited into an eligible Fidelity investment account (including IRAs!).

Limitations

Fidelity’s fees, while generally low, are a little higher on money market mutual funds than some peers. Since a money market mutual fund is where the extra cash in your account is held, this could negatively impact your return on investment.

Considering a Fidelity IRA?

Fidelity is a good option for many investors. Their platform is easy to use and offers a wide selection of low-cost investment options. It’s also an easy option if you’re looking to perform a 401(k) rollover. As with most self-serve investment accounts, it’s important for investors to check their accounts regularly to ensure their retirement portfolio still meets their needs.

If you’re looking to fund your new Fidelity IRA with a 401(k) rollover, Capitalize can help. We’ve made it our mission to make this process easier for everyone. We can handle the entire process for you. Most of the process can be done online and our rollover experts will guide you through any of the manual parts. Get started with your 401(k) rollover in just a few minutes.