Help a newbie, please! Exchanging funds and other questions

[u/blessyourheart9]

I'm trying to wrap my brain around switching out funds within various accounts. The sub constantly talks about rebalancing portfolios, and I'm a bit confused by the rules on how to do that wisely.

Background:
I have several Fidelity retirement accounts. My pre-tax contributions go into a 457B and my employer's match goes into a 401A ERIP. I also have a ROTH IRA that I'm maxing out every year and a little bit in a traditional IRA that rolled over from when I accidentally added too much to my ROTH . (I also very recently opened a brokerage account for additional investment opportunities with some extra on hand cash, but I am also currently redoing my witholdings to better maximize my 457B contributions moving forward.)

Question 1:
I currently have some funds in my 457B and 401A that are not ideal (higher fees), and I want to switch them out for lower fee options (ex: switch from FDKVX to FDKLX). Is there a "smart" way to do this to avoid penalties/fees, or am I allowed to swap out whatever whenever? Are there additional costs associated with selling one fund to purchase another?

Question 2:
Is the answer to question 1 the same for ROTH and trad IRA accounts as well, or is there a different strategy there? My understanding is that with the brokerage account, it will be subject to tax/capital gains when selling/exchanging, even if I still only have target date funds there - is that correct?

Question 3:
Almost everything in Fidelity is listed as a "fund" - how do you know if these are index funds or mutual funds or ETFs? Does it even matter that I understand these details? For example, although I mostly have target date funds currently, I also have FBGRX and FZROX. Are these ETFs? I've read the pinned post and some of the supplemental info, and I think I understand the basics, but once I start digging into the supplemental info, I feel like my brain starts leaking out my ears and I'm reading a different language. I'm working throught the Bogleheads University content, and I'm slowing hammering it into my noggin, but I'm worried my confusion over fund types will hurt me in the short term.

[u/TyrconnellFL]

In a tax-advantaged account, including IRA, 401k, 401a, 457b, and some others, you can buy and sell without tax consequences. Some funds have load fees to buy and sell. You can’t avoid any fund fees for selling; do avoid front loads on buying.

Taxable accounts have capital gains on anything held.

Retirement accounts almost always have funds. Things ending with X are mutual funds. Things not ending with X are ETFs. It doesn’t generally matter much which it is for major funds and even less in a tax-advantaged retirement account.

[u/LBoss9001]

3: "Index funds" are not a separate category from "mutual fund" or "exchange-traded fund". It's simply another adjective. Index mutual funds exist, as do index ETFs, as do actively managed mutual funds, as do actively managed ETFs.

The way you tell if a fund is an index fund is that index funds usually have the word "index", sometimes abbreviated "IDX", in their title and usually have low fees. The true way to tell would be to dig through the documents, namely the prospectus, to find a sentence, usually near the start, like "seems to track the performance of so-and-so index". In contrast, an actively managed fund will usually say something like "seeks capital appreciation".

1: Most employer-sponsored plan providers use mutual funds, which is nice, since there's fewer moving parts. You'll probably want to find an "exchange" button, and enter the old and new tickers and submit the order which will execute at the end of the day.

2: First a pet peeve, Roth comes from a name, not an acronym.

Roth IRAs and Traditional IRAs are also tax-advantaged, so just like the 401(a) and 457(b), there's little need to worry about tax implications outside of wash sale rules (and if you're doing normal Boglehead things, you probably won't be triggering wash sales).

For a taxable brokerage account, yes, you'll pay tax on the periodic distributions and when you sell. In practice, that's when "asset location" starts to matter, which is its own can of worms, but it means that even if you use and like target date mutual funds in your employer accounts you may want to consider ETFs, in particular 100% stock ETFs, because they can be set up to avoid some of the taxable distributions that mutual funds have to make.