Fidelity BrokerageLink (pre-tax / post-tax)

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raveon
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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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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 1:33 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 4:37 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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zincTwo
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by zincTwo »

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 4:36 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.
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drumboy256
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by drumboy256 »

raveon wrote: Thu Jan 14, 2021 1:33 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.
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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 5:32 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).
newbohead
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by newbohead »

I have the same situation (mixed pre/post tax funds in my BrokerageLink) and my google search led me here.

I spoke with someone at Fidelity in an attempt to separate the pre/post tax funds in BrokerageLink. From my discussion with the Fidelity rep, I believe all deposits into BrokerageLink are co-mingled upon deposit and they cannot be separated even if held in the Fidelity Cash Reserve.

For instance if you deposit $100 pre-tax into BrokerageLink and buy stock with the entire $100, then deposit another $100 post-tax funds. You now have $50/stock + $50 cash pre-tax and $50/stock + $50 cash post-tax.

Simply stated, they just keep track of each source's percentage in the BrokerageLink account: In the example it would be 50% pre-tax and 50% post-tax. This percentage would adjust anytime funds are added. Withdrawals would have no effect on the ratio as they would draw from each bucket proportionally.

So you can see under this system, there would be no way to allocate specific pre/post tax funds into any specific investments.

He said it "might" be possible to create a post-tax only brokerage link account by liquidating all holdings in the BrokerageLink, transferring everything to the 401-k, then transfer back only the post-tax money. But keeping the funds separately accounted for in the same BrokerageLink account is not possible (at least under my company's plan)
northfork
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by northfork »

According to the fidelity rep I spoke with the funds are comingled (as previously mentioned) and the choice to have two separate accounts (one for pretax on for post) is up to the company's plan. IMHO two separate accounts would be superior for those who want different asset allocations for pre and post tax.

I eventually got tired of it and just moved everything back into the main 401k account. I still have the BL account open but with zero balance. If my company ever decides to allow two separate accounts (or fidelity allows different "sources" in BL as they do in the main account) I'll gladly use it but unless that happens, I'll stick with the funds in my 401k. They're not ideal, but neither was the BL solution and the benefit of having everything in the same account outweighed the negatives for me.
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by corp_sharecropper »

For mega backdoor roth, I look at my after-tax balance, liquidate that dollar value in brokeragelink, transfer that to the Netbenefits side of things. Now at this point those $ are a pro-rata mix of comingled sources. I call Fidelity, which I have to do anyway to make the rollover, and their people somehow re-characterize (my word, don't know if there's an official term) the balance such that it is now all after-tax and perform my withdrawal.

Sure, I wish I had all the flexibility and products at my disposal as I do in taxable account and could do everything online and/or automatically. It could be easier. But I'm not going to complain about it while I stuff my Roth IRA with more $ than most people are even able to. There's something so satisfying about seeing that money show up in my Roth IRA and proceeding to transact with zero consideration for taxes and still knowing I can access the money (the basis) whenever I want should that need arise.

I once took a decent sized loss, and it seems that they're still tracking the cost basis of that so I don't have to worry about gains on After-tax for a good while thanks to that.
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dmcmahon
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by dmcmahon »

corp_sharecropper wrote: Fri Apr 16, 2021 3:49 pm For mega backdoor roth, I look at my after-tax balance, liquidate that dollar value in brokeragelink, transfer that to the Netbenefits side of things. Now at this point those $ are a pro-rata mix of comingled sources. I call Fidelity, which I have to do anyway to make the rollover, and their people somehow re-characterize (my word, don't know if there's an official term) the balance such that it is now all after-tax and perform my withdrawal.

Sure, I wish I had all the flexibility and products at my disposal as I do in taxable account and could do everything online and/or automatically. It could be easier. But I'm not going to complain about it while I stuff my Roth IRA with more $ than most people are even able to. There's something so satisfying about seeing that money show up in my Roth IRA and proceeding to transact with zero consideration for taxes and still knowing I can access the money (the basis) whenever I want should that need arise.

I once took a decent sized loss, and it seems that they're still tracking the cost basis of that so I don't have to worry about gains on After-tax for a good while thanks to that.
I did the same. Fidelity was very nice about it, but the process is clumsy to say the least. I was also out of the market in cash for a few days to make it happen. I’ll have to do it again in a future year, as I chip away at Roth converting the account. The problem is I have a lovely ladder of TIPS bonds and I don’t want to take that to cash to move the funds. I’ll have to wait for it to unwind naturally, which will take a decade. In-kind transfers can be done between a trad IRA and a Roth.
corp_sharecropper
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by corp_sharecropper »

dmcmahon wrote: Fri Apr 16, 2021 6:48 pm
corp_sharecropper wrote: Fri Apr 16, 2021 3:49 pm For mega backdoor roth, I look at my after-tax balance, liquidate that dollar value in brokeragelink, transfer that to the Netbenefits side of things. Now at this point those $ are a pro-rata mix of comingled sources. I call Fidelity, which I have to do anyway to make the rollover, and their people somehow re-characterize (my word, don't know if there's an official term) the balance such that it is now all after-tax and perform my withdrawal.

Sure, I wish I had all the flexibility and products at my disposal as I do in taxable account and could do everything online and/or automatically. It could be easier. But I'm not going to complain about it while I stuff my Roth IRA with more $ than most people are even able to. There's something so satisfying about seeing that money show up in my Roth IRA and proceeding to transact with zero consideration for taxes and still knowing I can access the money (the basis) whenever I want should that need arise.

I once took a decent sized loss, and it seems that they're still tracking the cost basis of that so I don't have to worry about gains on After-tax for a good while thanks to that.
I did the same. Fidelity was very nice about it, but the process is clumsy to say the least. I was also out of the market in cash for a few days to make it happen. I’ll have to do it again in a future year, as I chip away at Roth converting the account. The problem is I have a lovely ladder of TIPS bonds and I don’t want to take that to cash to move the funds. I’ll have to wait for it to unwind naturally, which will take a decade. In-kind transfers can be done between a trad IRA and a Roth.

Unless your TIPS ladder is 100% of brokeragelink there's no reason you need to liquidate all your brokeragelink holdings. You just liquidate an amount equal or just slightly greater than your after-tax balance and then that gets re-characterized as after-tax. You can buy individual tips in your plan's brokeragelink? Wow. Mine is limited to only mutual funds.
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dmcmahon
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by dmcmahon »

corp_sharecropper wrote: Fri Apr 16, 2021 7:15 pm
dmcmahon wrote: Fri Apr 16, 2021 6:48 pm
corp_sharecropper wrote: Fri Apr 16, 2021 3:49 pm For mega backdoor roth, I look at my after-tax balance, liquidate that dollar value in brokeragelink, transfer that to the Netbenefits side of things. Now at this point those $ are a pro-rata mix of comingled sources. I call Fidelity, which I have to do anyway to make the rollover, and their people somehow re-characterize (my word, don't know if there's an official term) the balance such that it is now all after-tax and perform my withdrawal.

Sure, I wish I had all the flexibility and products at my disposal as I do in taxable account and could do everything online and/or automatically. It could be easier. But I'm not going to complain about it while I stuff my Roth IRA with more $ than most people are even able to. There's something so satisfying about seeing that money show up in my Roth IRA and proceeding to transact with zero consideration for taxes and still knowing I can access the money (the basis) whenever I want should that need arise.

I once took a decent sized loss, and it seems that they're still tracking the cost basis of that so I don't have to worry about gains on After-tax for a good while thanks to that.
I did the same. Fidelity was very nice about it, but the process is clumsy to say the least. I was also out of the market in cash for a few days to make it happen. I’ll have to do it again in a future year, as I chip away at Roth converting the account. The problem is I have a lovely ladder of TIPS bonds and I don’t want to take that to cash to move the funds. I’ll have to wait for it to unwind naturally, which will take a decade. In-kind transfers can be done between a trad IRA and a Roth.

Unless your TIPS ladder is 100% of brokeragelink there's no reason you need to liquidate all your brokeragelink holdings. You just liquidate an amount equal or just slightly greater than your after-tax balance and then that gets re-characterized as after-tax. You can buy individual tips in your plan's brokeragelink? Wow. Mine is limited to only mutual funds.
Been there and done that! The remaining BrokerLink assets are all TIPS.
SnowBog
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by SnowBog »

Apparently some plans only have a single BrokerageLink account. My understanding is those are always co-mingled. (This is what my plan is.)

Other plans have two BL accounts (one for pre-tax, the other for Roth), allowing you to pick investments separately.

Since mine didn't allow it, I withdrew the money out of BL back to NetBenefits (with reps help), then did a rollover to my Roth IRA.

Now I leave the after-tax/Roth funds in NetBenefits, do an in-plan Roth conversion (now automatically!), and then when the balance is enough to care, I call Fidelity to rollover to Roth again (far simpler than trying to get out of BL).
newbohead
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by newbohead »

corp_sharecropper wrote: Fri Apr 16, 2021 3:49 pm For mega backdoor roth, I look at my after-tax balance, liquidate that dollar value in brokeragelink, transfer that to the Netbenefits side of things. Now at this point those $ are a pro-rata mix of comingled sources. I call Fidelity, which I have to do anyway to make the rollover, and their people somehow re-characterize (my word, don't know if there's an official term) the balance such that it is now all after-tax and perform my withdrawal.
wow that sounds like a lot of work for a withdrawal. I hope the process is easier by the time I'm ready to retire. This sounds like you cannot withdraw funds directly from BrokerageLink and you must transfer to netbenefits first, is this correct?

My plan allows me to process fund transfers online both to and from BrokerageLink <-> 401K. Do you have to do this over the phone? (i.e. "make the rollover")
corp_sharecropper
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by corp_sharecropper »

SnowBog wrote: Fri Apr 16, 2021 8:26 pm Apparently some plans only have a single BrokerageLink account. My understanding is those are always co-mingled. (This is what my plan is.)

Other plans have two BL accounts (one for pre-tax, the other for Roth), allowing you to pick investments separately.

Since mine didn't allow it, I withdrew the money out of BL back to NetBenefits (with reps help), then did a rollover to my Roth IRA.

Now I leave the after-tax/Roth funds in NetBenefits, do an in-plan Roth conversion (now automatically!), and then when the balance is enough to care, I call Fidelity to rollover to Roth again (far simpler than trying to get out of BL).
Isn't there a 5 year wait from Roth 401k to Roth IRA and another 5 year wait once in the Roth IRA if under 59.5?
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F150HD
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by F150HD »

anyone notice the font change in Brokeragelink? noticed it over the past month or so, not a fan. why change what was there? is there a way to change it back?

not the worst problem to have, but, did prefer the former font.
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zincTwo
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by zincTwo »

F150HD wrote: Wed Jul 07, 2021 7:24 pm anyone notice the font change in Brokeragelink? noticed it over the past month or so, not a fan. why change what was there? is there a way to change it back?
The new font is also visible on my general brokerage account view as well. I could not find a way to change it.
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1789
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Re: Fidelity BrokerageLink (pre-tax / post-tax)

Post by 1789 »

raveon wrote: Thu Jan 14, 2021 1:33 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?
It may not be allowed in brokeragelink. Mine doesn't allow me. So what you can do is transfer either some pretax or some after tax money from 401k to brokerage link but don't try to hold both pre and post tax monies there.
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