Lost and Found: Tracking Down Forgotten 401(k) Accounts

Lost and Found Tracking Down Forgotten 401(k) Accounts

In today’s changing job world, switching careers happens a lot. It’s exciting, but it can also present a potential pitfall: forgetting about your 401(k) – the money set aside for your future. It turns out, forgotten 401(k) accounts hold a shocking $1.65 trillion in assets, according to Capitalize. This jaw-dropping number can lead to serious financial problems that many are unaware of. 

The Scale of the Problem is Staggering 

Billions of dollars neglected in forgotten retirement accounts across the country. Instead of compounding and growing over time, these dormant accounts sit idle, often subject to higher fees and lower returns that can eat away at your savings. Multiple accounts also complicate retirement planning, making it harder to see the big picture of your financial future. 

Why Forgotten 401(k) Accounts are on the Rise 

According to the U.S. Bureau of Labor Statistics, older Millennials held an average of nine jobs between the ages of 18 and 36. With so many job changes, it’s no wonder that keeping track of multiple retirement accounts has become a challenge. Each job switch might land you a new 401(k), and without rolling over the old ones into a new employer’s plan or an IRAit’s easy to lose track of them. Over time, managing these scattered accounts can become overwhelming, leading many to simply forget about the funds they’ve accumulated.  

401(k) stat

In response to this challenge, the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) is rolling out an online tool to help workers track down lost retirement savings. Thanks to the SECURE Act 2.0, this tool is designed to help “missing participants” track down their benefits. This tool will go into effect by December 29, 2024. Plan administrators are urged to pitch in by sharing information voluntarily to build up the database. Ultimately, the initiative aims to simplify access to retirement funds and fortify individuals’ financial security.  

How to Find a Lost 401(k) Account 

If you find yourself among those with misplaced savings, don’t worry! Here’s how you can locate and retrieve them: 

  • Contact Your Former Employers: Reach out to HR or benefits departments of previous employers. They can provide information about old 401(k) accounts and direct you to plan administrators. Sometimes, unclaimed accounts are turned over to the state. 
  • Check Your Mail: Look for statements or notices from plan administrators that may have been mailed to your last known address. 
  • Review Personal Records: Check old pay stubs, tax returns, or financial documents mentioning 401(k) contributions or plan administrator contact information. 
  • Consult a Financial Advisor: If you’re having trouble finding old 401(k) accounts, a financial advisor can offer guidance on managing and merging retirement savings. 

What to Do with Your Found 401(k) Account 

Once you’ve found your old 401(k) account, deciding what to do with it is the next step. Combining your retirement accounts can bring various benefits such as reduced fees, simplified management, and enhanced growth. Here are your options: 

104(k) Grid

Imagine the peace of mind that comes with knowing all your retirement savings are working efficiently for you. By merging your accounts, you can reduce fees, simplify management, and maximize your investment growth, gaining a clear, comprehensive view of your financial future. 

Taking Control of Forgotten 401(k) Accounts 

The true cost of forgotten 401(k) accounts goes beyond just the financial losses. Fortunately, there are steps you can take to tackle this issue head-on. Instead of worrying about multiple accounts with varying fees, investment options, and growth rates, you can consolidate your retirement savings into a single, coherent plan.  

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