It is common for people to have multiple jobs during their careers. According to CareerBuilder, millennials typically stay in a job for about two years and nine months, while baby boomers stick around for an average of eight years and three months.
With all this job-hopping, it can be tough to keep tabs on your retirement accounts. There were reportedly around 29.2 million forgotten 401(k) accounts as of May 2023. These forgotten accounts held about $1.65 trillion in assets, which is roughly 25 percent of all 401(k) assets.
Read on to learn how to find your old 401(k) account.
Why should you try to find your old 401(k)?
It’s important to make an effort to locate your old 401(k) accounts because being aware of all your retirement savings helps you make informed decisions about your financial future.
When you contribute to a 401(k) account, you are setting aside a portion of your earnings for retirement. By locating a lost 401(k), you are ensuring that you reclaim the funds you worked hard to accumulate.
By finding and claiming your lost 401(k) accounts, you’re ensuring that no funds are left unclaimed and can be added to your overall retirement savings
Retirement savings grow through the power of compounding. When you locate a lost 401(k) account and combine it with your other savings, you allow the funds to continue growing over time. As your investments generate returns, those returns can, in turn, generate additional returns. This compounding effect can significantly boost your retirement savings, even with relatively small amounts initially.
How to find old 401(k) in 4 ways
Here are four ways to locate your old 401(k) accounts.
1. Look through your documents
Start by searching through your personal documents, such as old tax returns, employment records, or any paperwork related to your previous jobs. Check your personal email or laptop for digital records or communications related to your retirement accounts.
2. Connect with your old employers
Reach out to your previous employers, specifically their HR department, accounting department, or plan administrator. While they’re not obligated to assist you in locating your old 401(k), it’s worth contacting them to inquire about the existence and status of your account. Provide them with relevant details like your full name, Social Security number, and employment dates to help with the search.
3. Search unclaimed property databases
Several resources exist that can help you search for unclaimed 401(k) accounts.
- FreeErisa
- National Registry of Unclaimed Retirement Benefits
- U.S. Department of Labor’s Abandoned Plan
- U.S. Pension Guaranty Corp.
4. Use your Social Security number
Your Social Security number can be a valuable tool when attempting to locate your old 401(k) accounts. It enables access to various databases and search tools mentioned earlier. Providing your Social Security number when reaching out to employers or conducting online searches can increase the chances of finding your lost retirement accounts.
What to do once you find your old 401(k)
Once you find your old 401(k) account, you have several options. Here’s what you can do.
1. Leave it with your former employer
You have the option to leave your old 401(k) with your former employer’s plan. However, this may not always be the most beneficial choice, especially if you’re no longer contributing to the account. You won’t be able to add more money to it, and managing multiple retirement accounts can become complex over time.
2. Roll it over into your current employer’s plan
If your current employer offers a 401(k) plan, you can choose to roll over your old 401(k) into it. This option allows you to consolidate your retirement savings into one account, making it easier to manage. To do this, you’ll need to check if your current employer’s plan accepts rollovers and follow its specific procedures for initiating the rollover.
3. Roll it over into an IRA
Rolling over your old 401(k) into an IRA can be a smart move. An IRA is an individual retirement account that remains attached to you, regardless of your employer. It provides more flexibility and control over your investments. To initiate the rollover, you’ll need to open an IRA with a financial institution of your choice (such as a bank or brokerage firm) and follow its guidelines for transferring the funds from your old 401(k).
4. Cash your money out
Cashing out your old 401(k) means withdrawing the funds as a lump sum. However, this option should be carefully considered as it may have tax implications and penalties. If you withdraw the money before reaching the age of 59 ½, you may be subject to a 10% early withdrawal penalty in addition to income taxes. Cashing out should generally be a last resort, and it’s recommended to consult with a financial adviser or tax professional before making this decision.
Locate Your Lost 401(k) for a Stronger Retirement Future
Guidelines on crafting your best retirement scenario suggest aiming to replace 70% of your annual pre-retirement income. With a little time and effort, you have the power to uncover your old 401(k) and regain control over your retirement savings. Remember, every dollar counts when it comes to saving for retirement. By locating and effectively managing these accounts, you provide yourself with the opportunity to potentially grow your retirement nest egg. Don’t let those lost funds go unclaimed — take the necessary steps today to locate your old 401(k) and set yourself on the path toward a more secure and prosperous retirement.
FAQ
What to do if your old 401(k) provider is no longer in business?
If your old 401(k) provider has gone out of business, reach out to the Pension Benefit Guaranty Corporation (PBGC). It can help you locate and transfer funds from abandoned or terminated plans, ensuring that you don’t lose track of your retirement savings.
How long does it typically take to locate an old 401(k)?
The time it takes to locate an old 401(k) can vary depending on factors like how responsive your previous employers are, the availability of records, and the search methods used. Generally, the process can take a few weeks to several months. Patience and persistence are key in successfully locating your old 401(k).
Can you lose your old 401(k) if you don’t locate it?
Your old 401(k) funds are typically safeguarded and held separately from your employer’s assets. But if you don’t take the necessary steps to locate and claim your old 401(k), the funds could remain unclaimed and inactive. You may miss out on potential investment opportunities and growth. It definitely is worth putting in the effort to find and manage your old 401(k) to ensure you don’t miss the benefits it holds for your retirement.
