Step-By-Step Guide to Rebalancing Your Fidelity 401(k)

3 min read

Rebalancing your 401(k) is an essential part of keeping your retirement savings on track. Regular rebalancing helps maintain your desired asset allocation, which reduces risk and helps you meet your long-term financial goals. This blog post will walk you through the step-by-step process of rebalancing your Fidelity 401(k).

Here's a step-by-step guide to help you navigate the process and ensure your investments align with your financial goals.

  1. Log in to your Fidelity account: After logging in, you'll see your 401(k) plan and investment accounts like BrokerageLink, BrokerageLink Roth, and Brokerage Accounts, along with the value of the investments.

    Log in to your Fidelity account

  2. Access your 401(k) plan: Click on the 401(k) plan you want to rebalance. The page will show you a summary of your account, including the vested balance and rate of return.

    Access your 401(k) plan

  3. Go to the investments section: Click on the "Investments" option in the menu bar. You'll see the balance overview of your accounts, which displays the investments made in your 401(k) plan.

    Go to the investments section

  4. Change your investments: In the sub-menu under "Investments," click "Change Investments." It will take you to a page with options for changing your future investments (where your plan contributions will be invested going forward) and current investments. Under "Current Investments," you'll see two options: "Exchange one investment" (to swap one investment for another) and "Exchange MULTIPLE Investments" (to rebalance holdings to the investment mix you want).

    Change your investments

  5. Rebalance your portfolio: Click on "Exchange MULTIPLE Investments" to completely rebalance your portfolio. Proceed with the rebalance by clicking the "Start your Rebalance" option.

    Rebalance your portfolio

  6. Choose the source of rebalance: The new page will ask for the source of the rebalance. It means you have to describe what investments you want to exchange for new investments. Click "Rebalance all sources." to have complete control.

    Choose the source of rebalance

  7. On the new page, you'll see all the investments in your 401(k) plan. This page displays the current balance and allocation of the funds in your plan. Enter the desired allocation in the table to rebalance your 401(k) plan. Allocation, in simple, means the percentage of money you want to allocate to a particular fund.

    investments in your 401(k) plan

  8. Upon clicking on the fund name, you can see all the details like performance, expense ratio, assets under management, risk, etc. This information can help you make more informed decisions about your allocations and ensure that your investments are well-suited to your financial goals.

    see all the details

  9. If you are not shown a way to purchase ETFs and non Fidelity funds in your 401k, open a brokerage account within your 401k that will let you invest your money in ETFs, stocks etc. Visit this article for more details

Xillion's 401(k) Optimizer helps you select the best funds for your 401(k) plan based on your preferences and objectives. It analyzes your current 401(k) holdings and suggests how to improve them by eliminating high-fee and low performing funds and replacing them with better alternatives. You can also use Xillion's 401(k) Optimizer to monitor your portfolio and get alerts when it needs rebalancing or updating.

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