How To Find An Old 401(k)

• Leaving behind a 401(k) implies that people struggle to manage their wealth as they transition from job to job, resulting in money accumulating in these abandoned accounts. 
• A recent study discovered an estimated 24.3 million forgotten 401(k) accounts.
• These accounts hold nearly $1.35 trillion in assets, with $2.8 million left over each year.

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Where Is My 401(k)?

When leaving an old employer, taking your retirement funds with you isn't always a top priority. Leaving behind a 401(k) implies that people struggle to manage their wealth as they transition from job to job, resulting in money accumulating in these abandoned accounts. 

A recent study discovered an estimated 24.3 million forgotten 401(k) accounts. These accounts hold nearly $1.35 trillion in assets, with $2.8 million left over each year. According to the report, people who change jobs frequently leave up to $700,000 behind. When accumulating wealth, keeping track of your accounts and where your money is going is critical. You could be missing out on thousands of dollars if you don't.

When you leave a job, you have a few options for what to do with your 401(k). For example, you can transfer it to a new 401(k) with your new employer, to an investment retirement account (IRA), or keep it in the same account.

The problem with keeping it in the same account is that you can easily forget that you have the account and potentially lose track of where it has gone.

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How To Find A Lost 401(k)

Depending on how long it has been since you last worked for your previous employer, locating your forgotten 401(k) may be easier or more difficult. However, if you follow the steps outlined below, you should be able to locate your missing funds and improve your financial situation.

Call Your Former Employer- Contact your former employer to find an old 401(k). Speak with someone in Human Resources to get the information that you need. You will be prompted to provide your personal information and a date range of when you worked for the company. 

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Refer To Old Statements- Try contacting the plan administrator upon finding an old statement or referring to old pay stubs from your former employer. Your statement will also give you a general idea of how much you will be transferring.

You still have options if an employer goes out of business or gets bought out. But first, you can search the Unclaimed Property Database: 

FreeERISA- This database provides free access to all form 5500s filed with the Department of Labor in the last two years, including data on retirement, health, life, and other benefit plans from over 1 million U.S. businesses.

The Department of Labors Abandoned Plan- This database can assist you in determining what happened to your previous plan as well as the current administrator's contact information.

National Registry of Unclaimed of Retirement Benefits- By simply supplying your social security number, this site helps to find unclaimed retirement money.

If the registry does not find a plan associated with your social security number, it does not rule out the possibility that you have an old 401(k) plan lying around. It's possible that your former employer hasn't yet entered your information into the database. Set aside some time in the future to continue researching.

Forced Transfer IRAs

Upon leaving your employer, the plan administrator is required to provide you with a written explanation of your distribution rollover options, including the option to have the distribution transferred directly to another retirement plan or an IRA.

If your plan account balance is between the amounts of $1,000 and $5,000, the plan administrator may deposit the funds into an IRA in your name if you do not elect to receive or roll the funds over. If your plan account is $1,000 or less, the plan administrator may pay it to you without your consent, less, in most cases, 20% income tax withholding. You still have 60 days to roll over your distribution. 

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What To Do With An Old 401(k)

After successfully finding your old 401(k), it is important to keep track of it. You can add it to your current 401(k) if your plan allows it or roll it over into an investment retirement account. There are two ways to transfer your funds, a direct rollover, and an indirect rollover. Each rollover has its benefits.

Direct rollover: a direct rollover consists of your former plan administrator transferring the funds directly to your account after completing the necessary paperwork.

Indirect rollover: an indirect rollover consists of your former plan administrator issuing you a check after completing the proper paperwork. You will have 60 days to deposit the funds in your bank account before being subjected to paying taxes.

Transfer to an IRA: Another way to protect your retirement funds is to transfer your wealth into an investment retirement account. IRAs provide more investment options, whereas 401(k)s allow for higher contributions. It is critical to weigh your options before deciding to roll over. 

Trustee to Trustee Transfer: If you are entitled to a distribution, you can request that the payment be made directly from your IRA to another IRA or a retirement plan. Your transfer amount will be tax-free.

Cash out your account: If you are before the age of 59 ½, you will be subject to withdrawal penalties and income taxes. However, you can cash out the account and place the funds into a savings account for future purchases.

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Money Takeaway

It is not uncommon for job changers to lose track of old 401(k)s. However, with a bit of digging, it is possible to recover all that has been lost. If you decide to leave your retirement savings in a former employer's 401(k) plan, keep your contact information updated. If you receive statements electronically, ensure that the email address to which the statements are sent is kept up to date regularly.