I'm 26, and I have a Roth IRA and a Traditional IRA totaling about $7,000 each with Fidelity. The accounts are invested in Fidelity Freedom Funds 2040 and 2045, respectively. I'd like to get out of these actively managed funds and move into indexes with lower expense ratios. I'm considering doing an in-kind transfer of both funds in their entirety to Vanguard so that I don't leave the market. A Fidelity rep told me if I close the accounts to cash and then move them to Vanguard, it could take up to a month and I'd rather not be out of the market that long.

My intention would be to sell the shares once they're transferred and buy a Vanguard retirement fund or Vanguard index funds for both accounts. I'm leaning towards the retirement fund since I don't have the cash invested to purchase a diverse mix of indexes at the moment. Does anyone see any red flags in doing this?

I have $2,000 left to contribute to my Roth this year and I'm wondering when I should initiate the in-kind transfer, since once Fidelity receives Vanguard's paperwork, the accounts will be frozen and I won't be able to contribute 'till the transfer is completed, which I was told could also take up to 4 weeks. Any opinions on that one?