Contact Your Old Employer About Your Old 401
Employers will try to track down a departed employee who left money behind in an old 401, but their efforts are only as good as the information they have on file. Beyond providing 30 to 60 days notice of their intentions, there are no laws that say how hard they have to look or for how long.
If its been a while since youve heard from your former company, or if youve moved or misplaced the notices they sent, start by contacting your former companys human resources department or find an old 401 account statement and contact the plan administrator, the financial firm that held the account and sent you updates.
You may be allowed to leave your money in your old plan, but you might not want to.
If there was more than $5,000 in your retirement account when you left, theres a good chance that your money is still in your workplace account. You may be allowed to leave it there for as long as you like until youre age 72, when the IRS requires you to start taking distributions, but you might not want to. Heres how to decide whether to keep your money in an old 401.
The good news if a new IRA was opened for the rollover: Your money retains its tax-protected status. The bad: You have to find the new trustee.
Search Form 5500 Directory
All employers that provide 401 plans to their employees are required to fill out a 5500 form every year with the DOL. Websites like FreeERISA* allow users to search by company name to locate the correct Form 5500. Another option is to search the DOLs 5500 database. Both simple searches will provide you with additional contact information.
For further assistance in finding lost 401 plans, the U.S. Department of Labor has an Abandoned Plan Search, which helps participants and others find out whether a particular plan is in the process of beingor already has beenterminated. The name of the Qualified Termination Administrator responsible for the termination will be listed as well, giving you a good idea of who to contact .
But beware: some companies, even legitimate ones, can acquire your information about unclaimed retirement accounts and offer to assist you with your search, often with a percentage fee for their services.
When it comes to planning and saving for retirement, its vital to have all your assets accounted for. Locating an old 401 plan is like finding cash in the pocket of an old pair of jeans. Its money you forgot you had but are happy you found. So if you know youve contributed funds to a 401 account but cant figure out where those funds are, the resources listed above may help you find past retirement accounts that may have been lost along your employment journey.
Where Is My 401
When you leave your employer you have three options for the money youâve accumulated in your old 401 account. You can either:
- Leave it alone and keep it in the same account
- Roll over the funds to your new employerâs 401 plan or
- Roll over the funds to an IRA.
Most people leave their 401âs alone, either from neglect or they donât bother with facilitating the transfer.
You can rollover your old 401 funds to an IRA as soon as youâd like. If your IRA is already set up then it can accept the funds immediately.
However, if your new employer implements a waiting period before you can participate in their 401 program, then you have no choice but to leave it alone until youâre eligible.
This is where things fall through the cracks. Unattended 401âs can end up in a few different places: the old account you have with your former employers, an automatic safe harbor rollover account set up by your plan, the unclaimed property department in the state, or your old 401s could have been cashed out already if the balance was less than $5,000 when you left the job.
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Looked For Unclaimed Money
“Ghosted” 401 money certainly qualifies as missing money, and it could be uncovered on digital money-funder platforms like missingmoney.com.
The site, run by the National Association of Unclaimed Property Administrators, runs free searches for not just retirement funds, but for money in old bank accounts, safe deposit boxes, escrow accounts, and insurance policies. According to the website’s directions, if you get a “hit” on the site, just claim the property and fill out the requested details, then submit and you will receive instructions on the next steps from the state where you made the claim.
Investing For Retirement With Sofi
When can you retire? The answer depends on how much you have saved already, including any money thats in an old 401k account or money youve got stashed in an IRA. SoFi offers both traditional and Roth IRAs to help you build wealth for the future. A traditional IRA offers the benefit of tax-deductible contributions. Meanwhile, a Roth IRA offers tax-free qualified withdrawals in retirement.
If youre ready to take the next step, learn more about investing for retirement with SoFi.
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Check Unclaimed Property Databases
Unclaimed property databases can help you find abandoned financial accounts and reimbursements that are yours when the provider cant find your new contact information. Each state operates a property database, and you can enter your name to search.
After finding any unclaimed property, you can follow the steps to get your money. Its free to search using a website like the National Association of Unclaimed Property Administrators. You will also avoid phishing scams that appear when doing a basic google search for your states database.
Tip: Imposter sites may ask for your Social Security number and other personal details. You may need to enter your street address on legit sites to find relevant matches. The advanced search features can be helpful if you have a common last name like Smith or Jones.
You can also use to look for unclaimed property for free. This service also offers free credit score monitoring and identity monitoring. For more information, check out our full . In addition to potentially finding your old 401, you may also be eligible for these products:
- Security deposits
- Tangible property
What Happens If I Have Unclaimed 401k Funds From A Previous Job
The majority of unclaimed money comes from brokerage, checking and savings accounts, along with annuities, 401s and Individual Retirement Accounts. Companies are required by law to mail abandoned funds to the owners last known address. If theyre returned or the owner cant be reached, the assets must be relinquished to the state.
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Avoiding Lost Retirement Accounts
Keeping track of 401 and pension accounts is the best way to avoid the hassle of trying to find lost accounts. Financial advisers recommend rolling over your old 401 to a traditional IRA or to a new 401 account when you change jobs. You can maintain your tax benefits if you transfer the funds directly from an old 401 to a new one, while an IRA will require that you pay taxes when you deposit money from your old 401 but not when you withdraw it later. Cashing out your 401 when you leave a job is generally not advised since you will owe income tax and a 10 percent withdrawal penalty if you are under age 59 ½.
References
Rolling Over Your 401 Into An Ira Account Comes With Many Benefits
A Tea Reader: Living Life One Cup at a Time
When you change jobs, you generally have four options for your 401 plan. One of the best options is doing a 401 rollover to an individual retirement account . The other options include cashing it outand pay taxes and a withdrawal penalty, leave it where it isif your ex-employer allows this, or transfer it into your new employer’s 401 planif one exists. For most people, rolling over a 401 for those in the public or nonprofit sector) is the best choice. This article explains why and how to go about it.
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Other Forgotten Funds And Where To Find Them
Retirement funds arent the only assets that may be lost or forgotten. Others include insurance accounts or annuities unpaid wages pensions from former employers FHA-insurance refunds tax refunds savings bonds accounts from bank or credit union failures. In addition, heirs may easily overlook one or more accounts, if the estate plan failed to list all of them.
The National Association of Unclaimed Property Administrators reports that about 1 in 10 Americans have unclaimed property, and more than $3 billion is returned to owners each year.
Brokerage firms and other financial institutions must report unclaimed or abandoned accounts once they have made a diligent effort to locate the owner. Should they be unsuccessful, they must report it to the state agency that handles such matters. The agency then claims it through a process known as escheatment so that the owners can find it.
Websites you can use to find lost funds include your states unclaimed property site NAUPAs missingmoney.com the U.S. Department of Labor database for back wages or the Pension Benefit Guaranty Corp to claim your pension funds. To find accounts at failed banks, try the Federal Deposit Insurance Corp. For credit unions, go to the National Credit Union Administration.
A final note: Claiming your assets is free. Beware of anyone who wants to charge you for doing so.
Also of Interest
Option : Leave Your Money Where It Is
Usually, if your 401 has more than $5,000 in it, most employers will allow you to leave your money where it is. If youve been happy with your investment options and the plan has low fees, this might be a tempting offer. Before you decide, compare your old plan with any retirement plans offered at your new job or with an IRA of your own.
Your new employer-sponsored plan might have more limitations on it than your previous plan or other available options. Maybe there are fewer investment choices/options. Maybe it doesnt have an employer match or higher management fees. So youll want to look closely.
Also consider how often you tend to stay at jobs. If you change jobs every few years, you could end up with a trail of 401 plans at all the different places youve worked. Consolidating might be easier in the long run.
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How To Reclaim Your Retirement Plan With A Previous Employer
Millions of Americans accidentally or unknowingly leave money in retirement plans with previous employers. According to a study by the National Association of Unclaimed Property Administrators, Americans lost track of more than $7.7 billion in retirement savings in 2015.
If you’ve left a retirement plan with a previous employer, not to worry. Here are 6 tips you can follow to reclaim your money.
Retirement Funds Are Different
They are not turned over to the state, which means, its possible that nothing will happen to your money until something happens with your company ).
A common scenario is when you leave a company and move, perhaps you even change your email address.
Perhaps months or even years have gone by, or youve moved to the other side of the country. Then something happens with your employer and they need to contact you for instructions of what to do with your account.
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Find Old 401 And Pension Accounts
Sites like Unclaimed.org help people and businesses find unclaimed property. Unclaimed.org is run by the National Association of Unclaimed Property Administrators.
You can conduct a free search using an official state program and find any old 401 and pension plans that youve paid into and forgotten.
It is worth being cautious here, though. Official state programs will help you find and claim your pension and retirement funds for free. The National Association of Unclaimed Property Administrators can direct you to those state programs.
Professional hunters can also track down any funds for you in return for a fee, but you dont really need them. The information is available for nothing, and it wont take more than a few minutes to scan your states official program to discover whether youve got any hidden money.
If you start fishing emails out of your spam folder telling you that youve got several million dollars sitting in an account in Africa somewhere, give that a miss. Thats not yours, and you arent getting it.
Pros And Cons: 401 Vs Ira
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Roll Over 401 Into An Ira
For those who would prefer not to rely on their new companys 401 plans investment offerings, rolling over a 401 to an IRA is another option. Again, rollovers can be direct, direct trustee-to-trustee transfers, or indirect, with the distribution paid to the account owner. But either way, once you start the process, it has to happen within 60 days.
Ford generally favors rolling the money over into the new companys 401 plan, though: For most investors, the 401 plan is simpler because the plan is already set up for you safer because the federal government monitors 401 plans carefully less expensive, because costs are spread over many plan participants and provides better returns, because plan investments are typically reviewed for their performance by an investment advisor and a company 401 investment committee.
You Found Your 401 Plan Now What
If find your lost 401, congratulations! However, its not time to celebrate by blowing it all on a fancy vacation or a shopping spree. You invested that money with the purpose of building a retirement nest egg and thats exactly where those funds should stay.
To invest your old 401, you can do whats known as a rollover to avoid early withdrawal penalties. You can roll over the funds into an individual retirement account or into another retirement plan, such as your current employers 401.
Rolling over your 401 into an IRA is a relatively simple process. First, you need to open an IRA, which you can do though most banks, brokerage firms and robo-advisors. The funds from your old 401 then can be sent directly to your new IRA. If you prefer to keep all your investments in one place and your current employer offers a decent 401, then you may want to consider rolling over the funds into that account .
In both cases, you can avoid withholding taxes if you roll over the funds directly via the plan administrator. If a distribution is made directly to you, you have 60 days to deposit it into your new retirement account in order to avoid taxes and penalties.
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Check Unclaimed Benefits Websites
There are several online resources that can help you find a lost 401. The National Registry of Unclaimed Retirement Benefits is a database of lost retirement accounts maintained by PenChecks Trust, a retirement benefit distribution company. The service, which allows you to enter your social security number to securely search for lost accounts, is free. In some cases, a 401 has been terminated by the employer, and plan participants paid out. The U.S. Department of Labor maintains a database of terminated 401 plans that you can search by employer name.
How Many 401s Are Lost Each Year
According to the U.S. Government Accountability Office , hundreds of millions of dollars in unclaimed retirement benefits are reported to the U.S. government every year, with only some of it eventually claimed. The exact numbers are spotty, and based on the most recent survey conducted by GAO in 2016, but that survey found that of $25 million in retirement savings turned over to the government in 2016, only $601, on average, in 401 plan funds were claimed.
The reason for so many lost 401 plans is that theyre typically tied to employment. As employees are leaving an employer, they pay attention to that final paycheck and reimbursement for unused vacation days, but they may completely neglect any retirement savings accounts that were a perk of that employment.
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How To Find Your 401
1. Put in the legwork
In most cases, its fairly simple to track down a missing 401 plan. Start by contacting your former employers human resources department. Someone there should be able to look up your records and let you know if you have a plan and what options are available.
If the plan is now managed by another bank or brokerage firm, HR should be able to provide you with that contact information. Past 401 statements or plan documents also may include contact information for the plan administrator.
If your company has been acquired by another company, you may have to dig a little more. Start by searching for any news you can find online that lists details about the acquisition, including the name and location of the purchasing company. If youre still in touch with former colleagues from that job, they may be able to provide you with the information as well.
2. National Registry of Unclaimed Retirement Benefits
If your online sleuthing doesnt turn up anything, you can search the National Registry of Unclaimed Retirement Benefits, which helps employers connect with former employees who havent claimed their retirement benefits.
Note that if a plan doesnt show up on this registry, that doesnt mean you dont have one. It may just mean that your former employer hasnt added your records to the database yet. The site notes that you should check back in the future, as more participants are added to the database daily.
3. U.S. Department of Labors Abandoned Plan Search
