Tag: Fidelity IRA Match

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Is the Fidelity IRA Match a Gimmick? There Are Better Deals

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Fidelity just announced a novel way to attract your IRA retirement money: a match on your contributions for three years if you roll over money to Fidelity from a competitor.

But is it Fidelity IRA match the best deal for rolling over your money?

Here’s how it works

When you roll over money from a non-Fidelity IRA account, you’ll get a match on all of your new contributions for the next three years if you use this link to handle the rollover.

There are five tiers of matching:

  • 1% for rollovers of $10,000
  • 1.5% for rollovers of $50,000
  • 2.5% for rollovers of $100,000
  • 5% for rollovers of $250,000
  • 10% for rollovers of $500,000

You can contribute up to $5,500 to an IRA each year ($6,500 if you’re over age 50) and you can earn up to $1,950 in matching over the 3 years.

Here’s an example:

Let’s say you have $100,000 sitting in an IRA and you roll it over to Fidelity.

Then you contribute as follows, earning the 2.5% match on the contributions because you rolled over $100,000.

  • Year 1: Contribute $5,500, get a $138 match
  • Year 2: Contribute $4,000, get a $100 match
  • Year 3: Contribute $5,000, get a $125 match

That’s $363 in extra money Fidelity is adding to your account.

There may be better deals

Unless you’re doing a really large rollover for the bigger matches, you might earn more with a simple one time bonus.

For example, Fidelity itself has these lucrative one time bonuses via a different promotion:

$200 for rollovers of $50,000 – $99,999

On a rollover of $50,000, you’d earn only $165 from the ‘match’ bonus if you contribute $5,500 each year

$300 for rollovers of $100,000 – $249,999

On a rollover of $100,000 you’d earn $248 from the ‘match’ bonus if you contribute $5,500 each year

$600 for rollovers of $250,000 – $499,000

On a rollover of $250,000 you’d earn $825 from the ‘match’ bonus if you contribute $5,500 each year

$1,200 for rollovers of $500,000 – $999,000

On a rollover of $500,000 you’d earn $1,650 from the ‘match’ bonus if you contribute $5,500 each year

$2,500 for rollovers of $1,000,000

On a rollover of $1,000,000 you’d earn $1,650 from the ‘match’ bonus if you contribute $5,500 each year

Other major brokers like Schwab, Ameritrade, and ETrade offer similar one time deals.

And if you are a die hard maximizer, you could rollover your money each year to a new broker and collect bonuses each time. That would earn you substantially more than the Fidelity ‘match’ bonus could over 3 years.

But all in, while the idea of rewarding new contributions to your IRA each year is a great one as it reinforces good behavior, the actual rewards are sub-par in many cases. Do a little math first to make sure you’re not short changed.

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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