Fidelity BrokerageLink (pre-tax / post-tax)

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raveon
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Joined: Mon Dec 10, 2007 10:32 pm

Fidelity BrokerageLink (pre-tax / post-tax)

Post by raveon »

My 401(k) plan is with Fidelity. I made pre-tax and post-tax contributions to it. Recently, I transferred $X (pre-tax) and $Y (post-tax) money from 401(k) to BrokerageLink. $X+$Y is sitting in the Fidelity Cash Reserve. When placing an order in BrokerageLink, how do I tell Fidelitythat I want to put $X in fund A and $Y in fund B? I want to keep the pre-tax / post-tax money in separate funds for easier accounting. I can do it easily on the 401(k) investments where I can choose the contribution 'Source'. But I am not seeing such a feature in BrokerageLink. Is there a way?
Hebell
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Location: Boca Raton, FL

Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by Hebell »

I hope you get an answer. Fear of the book keeping complexity was exactly what kept us from doing this.
marcopolo
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by marcopolo »

Back when i had Brokerage link in my 401k, i never worried about keeping the sources separate in my investing.
Fidelity kept track of all of it. Pre-tax contributions, After-tax contributions, and Employer matching were all tracked separately.
Not sure if that is plan specific, or if they do that for all 401k plans.
Once in a while you get shown the light, in the strangest of places if you look at it right.
corp_sharecropper
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by corp_sharecropper »

raveon wrote: Thu Jan 14, 2021 2:33 pm My 401(k) plan is with Fidelity. I made pre-tax and post-tax contributions to it. Recently, I transferred $X (pre-tax) and $Y (post-tax) money from 401(k) to BrokerageLink. $X+$Y is sitting in the Fidelity Cash Reserve. When placing an order in BrokerageLink, how do I tell Fidelitythat I want to put $X in fund A and $Y in fund B? I want to keep the pre-tax / post-tax money in separate funds for easier accounting. I can do it easily on the 401(k) investments where I can choose the contribution 'Source'. But I am not seeing such a feature in BrokerageLink. Is there a way?
You can't (at least in my 401k plan). If you look at "sources" in Netbenefits it will show your brokeragelink balances as well as the exact percentage/dollar amount in brokeragelink that is pre-tax, post tax, rollover, company match, etc as well as your total after-tax contributions.

Fidelity will keep track, there's no need to worry about that. They have to have the infrastructure in place to track in order to even accept after tax contributions
Hebell
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by Hebell »

Delete
Last edited by Hebell on Thu Jan 14, 2021 5:37 pm, edited 1 time in total.
Hebell
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by Hebell »

I believe I am thinking like the OP.

I would want to know the tax source. I wouldn't I wouldn't buy REITs for example, with the after-tax money. And I would want to put my growth stocks in the aftertax money, and the dividend payers in the before tax money. Doesn't sound like asset allocation by tax category is possible.
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BroIceCream
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by BroIceCream »

My understanding from a conversation with Fidelity (and may also be documented in company specific plan documents) -
Once the money is in "BrokerageLink" we rely on Fidelity accounting for separation of pretax/aftertax...but we cannot control the which BL investments get which type of funds - conceptually, they are co-mingled.

The only way to keep them truly separate is to have pretax/aftertax in different types of accounts (i.e. brokerageLink and non-brokerageLink) ; but then your investment options also may differ.

Personally, my IPS is consistent across tax/pretax, so I've decided not to worry about it, and be satisfied with Fidelity bookkeeping.
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anon_investor
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by anon_investor »

Hebell wrote: Thu Jan 14, 2021 5:36 pm I believe I am thinking like the OP.

I would want to know the tax source. I wouldn't I wouldn't buy REITs for example, with the after-tax money. And I would want to put my growth stocks in the aftertax money, and the dividend payers in the before tax money. Doesn't sound like asset allocation by tax category is possible.
This separation often is impossible in many 401k plans. It isn't possible in my current one.
drumboy256
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by drumboy256 »

raveon wrote: Thu Jan 14, 2021 2:33 pm My 401(k) plan is with Fidelity. I made pre-tax and post-tax contributions to it. Recently, I transferred $X (pre-tax) and $Y (post-tax) money from 401(k) to BrokerageLink. $X+$Y is sitting in the Fidelity Cash Reserve. When placing an order in BrokerageLink, how do I tell Fidelitythat I want to put $X in fund A and $Y in fund B? I want to keep the pre-tax / post-tax money in separate funds for easier accounting. I can do it easily on the 401(k) investments where I can choose the contribution 'Source'. But I am not seeing such a feature in BrokerageLink. Is there a way?
Fidelity has all of the info for all monies contributed pre and post tax. Cash settled will also be ear marked pre and post tax based on contribution type, it’s not something to worry about.
Promise is one thing. Fulfilling that promise is quite another. - Sir Alex Ferguson
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dmcmahon
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by dmcmahon »

BroIceCream wrote: Thu Jan 14, 2021 6:32 pm My understanding from a conversation with Fidelity (and may also be documented in company specific plan documents) -
Once the money is in "BrokerageLink" we rely on Fidelity accounting for separation of pretax/aftertax...but we cannot control the which BL investments get which type of funds - conceptually, they are co-mingled.

The only way to keep them truly separate is to have pretax/aftertax in different types of accounts (i.e. brokerageLink and non-brokerageLink) ; but then your investment options also may differ.

Personally, my IPS is consistent across tax/pretax, so I've decided not to worry about it, and be satisfied with Fidelity bookkeeping.
This is exactly right. The funds are comingled and you can’t separate them. I’m still trying to disentangle mine by transferring money back to the 401k and then using an in-service rollover, allowed by my plan at my age, to roll the Roth funds out to my Roth IRA. I originally did the BrokerLink to get access to TIPS bonds and I’m not sorry I did that. Now it’s tricky to separate the funds. Also the transfer back to the 401k out of BrokerLink has to be cash only, so I have to liquidate some investments to make it work.
annu
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by annu »

Just to add, atleast for my company Fidelity account for 401k, once I went brokeragelink, no more possible to seprate or even see what is what. Where as earlier I could see how much of any investment option I had picked, I could see how much of pre/post was there.
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CalculatedRisk
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by CalculatedRisk »

Edit2: I misspoke below. This all happened at Schwab with Schwab’s PCRA (like brokeragelink), though maybe fidelity can also give you two brokerage accounts.

Corrected:
I did A LOT of calling around to do something similar with my Schwab 401k, but with pretax and Roth funds. I ended up creating two separate brokerage accounts for my single 401k. Although the Schwab website had an option to move just Roth funds or pre-tax funds, turns out (around early 2019) that there was a bug and that funds were being moved/invested pro rata. A higher level Schwab phone support rep was able to put in a special request for me (manually) to properly split up the pretax and Roth funds between the two brokerage accounts. In my Roth brokerage, I invest in all equities. In my pretax brokerage, I invest in all bonds. Seems to be working well. Good luck, though—it took quite a bit of effort to sort out actually moving the right funds (website was saying it was moving the right funds, when it apparently wasn’t).
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