- You may invest in a variety of Fidelity stocks, bonds and mutual funds in your 401k plan. Depending on the number of years to retirement, different investments may be more appropriate based on your overall risk tolerance. Fidelity Freedom Funds, for example, are mutual funds that offer a set of diversified funds under the umbrella of a single mutual fund. You may choose one or more funds to allocate your retirement savings across investments with different strategies and investment risks.
- You may be able to borrow money from your Fidelity 401k depending on your employer's plan and other circumstances. In some cases, you may be eligible for a loan, which allows you to borrow from your 401k with the promise to pay it back. If you get a loan, you repay the principal amount plus interest. You are not subject to tax penalties for taking out a loan on your 401k because you are replacing your funds when you make payments over time. If you withdraw money from your 401k plan without the intention of putting it back, however, you are subject to early withdrawal penalties and taxes.
- If you leave your employer, you have several options for your Fidelity 401k. You have the option to keep your current plan as is, or you have the option to roll over your investments into your new employer's retirement plan. Additionally, you may roll over your investments into an individual retirement account (IRA). Finally, you have the option to withdraw the funds from your account. It is important to note that if you decide to take a distribution of your funds before you reach retirement age, you are subject to taxes and early withdrawal penalties.
- Your Fidelity 401k plan has maximum contribution limits based on annual IRS regulations. Contribution limits depend on your age and employer restrictions. The annual IRS dollar amount for 401k contributions is $16,500 per year as of 2009. If you are 50 or older, you may qualify to make catch-up contributions of an additional $5,500 per year.
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