A roll over is not considered a withdraw. A rollover is like a transfer, so there's no penalty. A withdraw is a withdraw (ex: taking cash out).
I rolled over three or four small IRAs from previous jobs into an IRA at my credit union. I was never penalized, since the rollover is just seen as a transfer.
See the bottom part for an explanation. Best if you can arrange a transfer directly from Schwab to Fidelity. They should be able to tell you how to do that.
It does not count as a withdrawal. The check will be for the full amount and as long as you deposit it into another qualified retirement plan, you will be fine.
You may receive a 1099-R tax form for the transfer, but it is not a taxable event as long as it goes directly into another plan, whether your new 401K or an IRA.
The company that holds your retirement money writes a check payable to the place you're rolling the money into. They mail the check to you, but you can't cash it and keep the money. The check is only good to deposit for the rollover.
I've done it three or four times now. Each time I call the place that's holding the money, and tell them I want to initiate a rollover. They send me paperwork, I fill it out with my banking info, and about 8 weeks later a check shows up that I take to the bank and put in my IRA account. Technically, I can see how you'd see it as a withdrawal, but I can't keep the money or cash the check so it's really penalty free rollover.
Kudos to you for doing this at 24! I'm 31 and not much farther ahead of you.
No minimum contribution but sadly no retroactive match.
I *will* be rolling it over to an IRA now instead of just the company 401(k) but will not be maxing it out at this point. However, should I go with roth or traditional? I had always leaned towards Roth but this part confuses me...
"If you roll over a payment from the Plan to a Roth IRA, a special rule applies under which the amount of the payment rolled over (reduced by any after-tax amounts) will be taxed. However, the 10% additional income tax on early distributions will not apply (unless you take the amount rolled over out of the Roth IRA within 5 years, counting from January 1 of the year of the rollover). If you roll over the payment to a Roth IRA, later payments from the Roth IRA that are qualified distributions will not be taxed (including earnings after the rollover)."
Roths are sort of the opposite of regular IRAs or 401ks in that you pay taxes on the $ now so you can earn tax benefits when you withdraw. So, if you do a rollover from a traditional 401k into a Roth, you will actually have to pay taxes since the 401k was pre-tax. You won't pay penalties, though.