How To Locate Your Old 401
If you have contributed to a 401 at a former employer or think that you may have done so, you probably want to find your account. Maybe you switched jobs or moved and lost track of your funds. Not to worry. Your money is protected and should still be out there. Here are several steps you can take to try to recover your old 401.
Locating your old 401 plan
If you have trouble locating your old 401, reach out to your Henry+Horne professional advisor.
How To Find A Lost 401 Account
Think you may be one of the millions with forgotten 401 money floating around somewhere? Start by scouring your personal email or laptop for any old 401 plan statements that you may have saved in the past.
“Your statement will provide your account number and plan administrator’s contact information,” Corina Cavazos, managing director, advice and planning at Wells Fargo Wealth & Investment Management, tells Select. Your former coworkers may have old statements that you can reference, too.
If you don’t have any luck, Cavazos says that your best bet is to contact your former employer’s HR or accounting department. By providing your full name, Social Security number and dates of employment with that company, you can have them check their 401 plan records to see if you were once a participant.
If you’ve tried contacting your 401 plan administrator or former employer to no success, you may be able to find old retirement account funds on the National Registry of Unclaimed Retirement Benefits. Upon entering your Social Security number, the secure website allows you to conduct a free database search to see if there’s any unpaid retirement money in your name.
Another search database is the FreeERISA website, which indicates if your former employer rolled your 401 funds into a default participant IRA account on your behalf. FreeERISA requires you to register before performing a search, but it is free to do so.
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.
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The Cons Of Leaving Your 401 Behind
Risk of Losing Track of Old 401s
Rolling over an old 401 or managing your savings during a job transition can be stressful and chaotic. Some people end up leaving behind an old account with the intention to revisit it later, only to forget about it or lose track of it as they are faced with other aspects of their job transition. This will make it difficult to put your savings to good use in a way that promotes your financial stability in the future.
As of now, if you have less than $5,000 in any old accounts, your previous employers will likely either cut you a check for the remaining balance or move the money into an IRA. Its up to you to find it, though.
Missing Out on Investment Opportunities
Do you know when you forget your old 401 accounts, you miss out on a chance for a solid investment plan? You were wise enough to set up a retirement plan to secure your financial freedom for the future. But, when you leave behind any amount of savings, it leads to loss of earning capacity.
Leaving behind money in an old retirement account also means that your savings dollars may not be invested in the most beneficial way possible for you. Staying on top of old accounts or rolling them over into your current plan can help you ensure you are investing every dollar with purpose, efficiency and your unique goals in mind.
Look For Contact Information
If you don’t know how to contact your former employer — perhaps the company no longer exists or it was acquired or merged with another company — see if you have any old 401 statements. These should have contact information to help put you in touch with the plan administrator.
If you don’t have an old 401 statement handy or yours doesn’t tell you what you need to know, visit the U.S. Department of Labor website and look up your employer. There you should find your old retirement account’s tax return, known as Form 5500. That will most likely have contact information for your 401’s plan administrator.
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Preventing A Lost 401 Plan
Tracking down a 401 associated with a job you held decades ago can be difficult and time-consuming. Taking the time to roll over a 401 to an IRA or your new employer’s 401 plan each time you change jobs will make your retirement savings easier to manage and gives you more control over investment options and fees. Initiating a trustee-to-trustee transfer to move your money directly to the new account allows you to avoid tax withholding and the potential to trigger additional taxes and penalties.
If you decide to leave your retirement savings in a former employer’s 401 plan, make sure to keep your contact information up to date. “If you move, change your address and update your phone number,” Tabor says. “If you are receiving your documents electronically, you should use an email that you will maintain access to after you leave your job.”
Copyright 2022 U.S. News & World Report
Inaction Can Be Costly
If you have left money behind, it would behoove you to track it down. The average balance in forgotten accounts is $55,400. Over a lifetime, says Capitalize, failure to reclaim these assets could cost individuals as much as $700,000 in retirement savings, an estimate based on data from the U.S. Department of Labor, the Census Bureau, 401 record-keepers, IRAs and the Center for Retirement Research at Boston College.
Forgetting about old 401s, and how much money is in them, is very common, says Kashif Ahmed, a CFP at American Private Wealth in Bedford, Massachusetts. Recently, we uncovered one for a client that had more than triple what she thought it had. Youve worked for this money, so its important to locate it and keep building it, says Tess Zigo, a CFP at Emerge Wealth Strategies in Palm Harbor, Florida. I’ve seen many young folks believe it or not who have old accounts sitting in money market funds not earning a dime.
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Search For Unclaimed Retirement Benefits
When all else fails, search for yourself in the National Registry of Unclaimed Retirement Benefits. Not all employers participate in this service, but many do because it provides benefits that help them meet their legal requirements. It’s a free service, and it only requires your Social Security number.
What Should I Do With A 401 From My Old Job
Weighing the pros and cons will help you choose the best option.
Question: I’ve switched jobs a few times and I have an old 401 that Im not sure what to do with. Should I roll it over? Is it OK to just let it sit there?
Answer: In most cases, it makes the most sense to roll your money over into an IRA or into your new 401 plan, if that’s allowed. may or may not be allowable–the specific bylaws vary by plan, so check on that first.)
That said, there are some good reasons to consider leaving your assets within the confines of a former employer’s plan.
Here are some considerations to help you weigh the pros and cons of both decisions.
Roll It Over Reason #1: You can do better on costs in your new plan, or on your own. Do some due diligence on your new plan and your old plan. plans.)
Often, 401 plans charge administrative fees, and many times the participants themselves bear these costs. Other times, plans use high-cost share classes of mutual funds that have extra fees embedded inside of them. Those extra fees tend to be more prevalent in plans of smaller employers, because small 401 plans have fewer investor dollars.
Larger plans can charge lower fees because they have scale advantages. With your assets pooled with other plan participants’, your new employer’s plan may have access to institutional share classes of funds, which typically feature very low costs and may be unavailable to investors with smaller balances.
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Why You Should Roll Over Your Old 401 Accounts
Once you find forgotten retirement funds, you can make it easier to keep track of your money by simply rolling over your old 401 accounts into an IRA at a brokerage you already have an account with. This way you can manage your nest egg easier since all of your money is in one place.
“It’s beneficial to consolidate your accounts to reduce oversight obligations,” Cavazos says. “Having all of your funds consolidated in one account allows you to keep track of your balance and account performance.”
If you already have an existing IRA, you can roll your 401 balance into that account. Otherwise, it’s easy to open a new IRA at the big-name brokers like Charles Schwab, Fidelity, Vanguard, Betterment or E*TRADE. Rolling over your old 401 plan into an IRA gives you more control over how you invest your retirement funds since you won’t be limited to just the funds that were offered by your former employer. These large brokerages give you thousands of investment options, including mutual funds, index funds and individual stocks.
Track Down Previous Employer Via The Department Of Labor
If you cant find an old statement, you may still be able to track down contact information for the plan administrator via the plans tax return. Many plans are required to file an annual tax return, Form 5500, with the Internal Revenue Service and the Department of Labor . You can search for these 5500s by the name of your former employer at www.efast.dol.gov. If you can find a Form 5500 for an old plan, it should have contact information on it.
Once you locate contact information for the plan administrator, call them to check on your account. Again, youll need to have your personal information available.
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Review 401 Plan Documents
Try to find a quarterly 401 statement or plan description. “Gather documents about your 401 plan and about your former employment,” says Anna-Marie Tabor, director and managing attorney of the Pension Action Center at the University of MassachusettsBoston. “Look for 401 statements, a description of the 401 plan, old pay stubs or tax documents that may show that you contributed to a 401.”
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You can check whether you made a 401 contribution in a given year on box 12 of your W-2 tax forms. When you file for Social Security benefits, you may receive a SSA Potential Private Pension Benefit Information Notice, which contains Internal Revenue Service data about employer retirement benefits you earned while working.
How To Find An Old 401 And What To Do With It
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There are billions of dollars sitting unclaimed in ghosted workplace retirement plans. And some of it might be yours if youve ever left a job and forgotten to take your vested retirement savings with you.
But no matter how long the cobwebs have been forming on your old 401, that money is still yours. All you have to do is find it.
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How To Search For Unclaimed 401 Retirement Assets
You can take a few steps to search for your unclaimed 401 retirement benefits. The first step is to gather as much information as you can about your former employers. If your employer is still in regular operation, theres a chance that your 401 is still in the account that you had when you were with the company.
If you need to do a bit more digging, here are some further steps you can take:
If You Find The Money
What to do with your 401 funds when you find the account largely depends on where you find it.
If the account resides in your employer’s plan, you do have the option to leave the money and the account there — just note you can no longer contribute money to it.
To get back in the game with your sidelined 401, roll it over into an individual retirement account or a current employer’s 401 plan. That way you can put the fund money to work by investing in stocks, bonds and funds that appreciate in value and accumulate more money for your retirement, on a tax-efficient basis.
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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.
Track Down Old 401 Plan Statements
The first thing you can do to find money held in forgotten 401 accounts is to go through old plan statements you may have. The statements could have come in the mail or you may have received them electronically through email.
Finding these statements makes it easier to know which employers you were at during the period when you had the 401 plan and can help you determine who to contact to access your account. You can also check with former co-workers who are still with the company to see who you should get in touch with.
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