Use Additional Government Document Recovery Tools
Lots of folks say the federal government is beholden to excessive paperwork and, in many ways, those people are right. But your hunt for an old 401 isn’t a good example of that mindset.
Exhibit “A” is the U.S. Department of Labor’s Abandoned Plan Database. The database can tell you if your company’s old 401 plan is still up and running, has been deep-sixed, or is being held by an outside administrator who can steer you to your old 401 account.
When using the website, the more information you can provide, the better. Your best bets include using the plan’s name, the name of your old employer, the city and state where the company resided, and the appropriate zip code.
What To Do Next
If your searches uncover an old 401 account in your name, your best bet is to roll the money in that account over to your current retirement savings account, be it another 401 or an IRA. Keeping all your retirement savings in one place helps you to keep track of how your investments are doing and whether or not you’re saving enough to meet your retirement goals.
How Do Benefits Work And How Can I Qualify
While you work, you pay Social Security taxes. This tax money goes into a trust fund that pays benefits to:
Those who are currently retired
To people with disabilities
To the surviving spouses and children of workers who have died
Each year you work, youll get credits to help you become eligible for benefits when its time for you to retire. Find all the benefits Social Security Administration offers.
There are four main types of benefits that the SSA offers:
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How To Find Lost Pension Funds
Lets say your previous employer owes you pension benefits. But the company goes out of business or files for bankruptcy. What happens to your money?
Often, your old employer will turn over the funds to the Pension Benefit Guaranty Corporation . Thats a federal organization. Its Missing Participants Program tracks down employees who are owed retirement money.
Although it primarily deals with pensions, the PBGC has expanded to handle 401 funds for companies as well. PBGC even pays out the money with interest when it connects with the account owners.
If youre searching for pension benefits, you can also contact your former employer..
You may need to prove your work history and eligibility for pension benefits. Your old W-2 forms and your earnings statement from the Social Security Administration can help in this regard. To find this earnings statement, file Form SSA-7050 here or call 800-772-1213.
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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Tips To Avoid Losing Retirement Accounts
Transferring your old 401 funds to an IRA or your new companys 401 plan is a great idea.
As you transfer your money, you dont have to worry about losing sight of your old 401 or thinking about reallocating your portfolio. You also dont have to go through the hassle of tracking it down if your former company goes out of business.
However, if you do decide to leave your 401 account with your old company which can be very useful at times there are some best practices.
If you change your address or phone number, first make sure you update your old company. Second, keep all of your retirement plan records and tax returns together. That will help you track your money in the future.
What Happens If I Have Unclaimed 401 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. Once an account is considered inactive or dormant for a period of time , 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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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.
Organize And Rebalance Your Accounts
After years of neglect, your forgotten retirement accounts may not be properly balanced. This means there may be too much emphasis on one type of investment, or not enough on another.
If you plan to keep the IRA or company plan open, you may want to consider diversification, so theres the right amount in stocks, bonds, U.S. investments or international exposure thats appropriate for your investment goals and risk tolerance.
Youll need to check each account individually at first. However, if you can list them all in one place, youll see how your combined investment diversification stands up. An online tracking service can continue to monitor your accounts, possibly flagging you if you need to consider rebalancing again.
Online tracking services cant do the rebalancing for you, however youll have to go to each individual account to manage the rebalancing. And if the diversification seems off but its not time for you to rebalance, youll have to look at each individual account to determine which one may be out of balance the most.
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What About Using Unclaimed Property Funds Maintained By Some States
It may be a viable option to transfer remaining balances to a state unclaimed property fund via the escheatment process in the state of the participants last known residence or work location. Because there are variations in how this process works, please consult the applicable state before proceeding.
How To Find Missing Or Lost Retirement Accounts
Americans have reportedly lost or abandoned more than $1 trillion in retirement benefits from previous employers. Fortunately, if youve misplaced retirement account funds, there are more ways than ever to find and claim your money.
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Lost Participants What Employers Need To Know
- 401 Administration
- Lost Participants What Employers Need to Know
One of the most frustrating issues plan sponsors run into is locating lost participants. Whether youre terminating your plan, or simply trying to eliminate small residual balances from the plan to lower your costs, understanding how to handle lost participants is crucial to the successful administration of your retirement plan. To this end, well answer some of the most common questions plan sponsors have below.
If Youve Ever Had A 401 Account With An Employer And Lost Track Of It After Youve Left Youre Not Alone
We estimate that there are over 25 million orphaned 401 accounts just like yours. These are accounts tied to former employers that continue to have money in them, but are not actively being monitored or used.
At Capitalize, we help people find these old, orphaned 401 accounts and consolidate them into a new retirement account for free. This helps them better keep track of their retirement savings over time.
The money youve put away in a 401 account remains yours even after youve left that job. Most of the time its still at the same financial institution that managed it while you had it. This financial institution is known as a 401 provider. Its a company engaged by your former employer to hold and manage your 401 assets. You can see a full list of 401 providers here.
Some of the time, though, your money has been transferred to a new institution. That generally happens in one of three cases:
- Your former employer changes their 401 provider when this happens your 401 account will be transferred over to the new institution.
- Your former employer is acquired by another company when this happens your account usually gets transferred to the 401 provider used by the acquiring company.
- Your account balance was under $5,000 and was transferred to an IRA at a different institution this is known as a forced rollover and is allowed by some 401 plans.
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Check Your States Unclaimed Property Database
If your former company goes bankrupt, you will still be fine. The law protects your 401 funds from its creditors.
Often times, the brokerage firm that held the funds for your former companys 401 plan will withhold the funds for you. However, that firm may eventually turn the money over to the states unclaimed real estate fund.
If your account becomes inactive or dormant for just three years, depending on your state, the administrator can send the funds to your last known address. If these funds are returned to the sender or you are unavailable, your assets will be ceded to the state.
There are a number of websites that allow you to search for unclaimed money using databases in various states. Many states have their own websites, but these can be a good place to start:
What Other Sites Can I Visit To Check For Lost Money
As I mentioned earlier, lost retirement accounts are just one type of unclaimed money. Here are some other resources that can help you find missing money:
- MissingMoney.com: a government database of unclaimed property.
- HUD.gov: If youve ever gotten a Federal Housing Administration loan, you may be due a refund.
- FDIC.gov: Search for unclaimed funds from failed banks and other financial institutions on this site.
- USA.gov: This site is full of resources to search for unclaimed money, including federal money such as tax refunds and bonds.
- FindMyFunds.com: links to the official website of at least 25 states including some not covered by MissingMoney.com.
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Make Sure You Actually Contributed
Before you go through the hassle and process of calling the HR department at your old employer, or searching through databases, its a good idea to verify that you contributed to the plan.
If you are unsure if you contributed to a 401 plan, you can check your previous year tax return and old W-2. Any contribution will be in Box 12 of the W-2.
ERISA, or the Employee Retirement Income Security Act of 1974, sets minimum standards for retirement plans, and protects retirement savings from abuse or mismanagement.
Among other things, employees are required to make annual reports
How To Track Down That Lost 401 Or Pension
Can’t Find your old 401 or that old pension? Here is how to track your money down. Shutterstock
At least once every few months a long-term client brings in a retirement account statement and says, I forgot I had this retirement account. Can you help me with it? Sometimes these accounts are tiny but other times they hold a substantial amount of money. All of them are old, and havent been looked at in years. If you find yourself in this position, follow these steps to locating your 401 or other retirement accounts from previous employers.
Do you ever feel like you know you saved more for retirement than your statements indicate? Are you certain you must have forgotten about an old retirement account or pension with a previous employer? You likely arent crazy, and youre definitely not alone.
Americans lost track of more than $7.7 billion worth of retirement savings in 2015 alone by accidentally and unknowingly abandoning their 401.– USA Today, February 25, 2018
The days of graduating college, getting a corporate job and staying with the same employer until the retirement age of 65 are long gone. Today, people are jumping from job to job which often leaves a trail of old retirement accounts and even a few pensions. Because of this, a surprising number of people lose track of these old accounts. Forgetting about these accounts can really hurt your overall retirement security when you factor in compounding interest.
What happens when a 401 plan is terminated?
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Have Retirement Money Set Aside But Dont Know Where Try These Strategies
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Between job changes, growing families, maybe even cross-country moves, losing access or forgetting about a retirement account is completely plausible.
Retirement Tip of the Week: If you think you have money floating around in a 401 or pension somewhere, try and find it with a few helpful resources.
For those of us who have been in the workforce for some time, it is easier than one might think to lose track of retirement assets, said Larry Harris, a certified financial planner at Parsec Financial Wealth Management.
Lost retirement money could be held in an abandoned 401 plan or a pension, or in the form of stock shares granted by the employer.
The first step is to check your states treasury site, as states will take custody of these assets after a certain number of years . Many states have an option to perform a search for unclaimed property, said Christopher Lyman, certified financial planner at Allied Financial Advisors. Be careful as to what site youre actually on a state government website will end in .gov, for example. Claiming the property from there is a fairly straightforward process laid out by the state, he said.
Try running the search using any name ever used, said Sarah Carlson, a certified financial planner and founder of Fulcrum Financial Group.
How Do I Find My Old 401
If you’re not sure where your old 401 is, there are three places it could likely be. Here’s where to find your old 401:
Right where you left it, in the old account set up by your employer.
In a new account set up by the 401 plan administrator.
In the hands of your states unclaimed property division.
Heres how to start your search:
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Leverage The National Registry
The National Registry, run by Pen Check, a retirement plan distribution firm, is a nationwide, secure database listing of retirement plan account balances that have been left unclaimed by former participants of retirement plans.
The site offers an easy, free-of-charge way to locate lost or forgotten employee retirement accounts. You can conduct as many searches as you want, using just your Social Security number. The site is safe, encrypting any information you input on a secure server.
Tips To Avoid Losing Retirement Account Funds
Its a great idea to roll over your old 401 funds to an IRA or to the 401 plan at your new company.
If you roll over your funds, you wont have to worry about losing track of your old 401 or remembering to reallocate your portfolio. You also wont have to face the hassles of tracking everything down if your former company goes out of business.
However, if you decide to leave your 401 account with your old company which can sometimes make a lot of sense there are a few best practices.
First, if you change your address or phone number, make sure you update your old company. Second, keep all your retirement plan documents and tax returns together. That will help you track down your money in the future.
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Use Resources To Discover Unclaimed Assets
Once you use these resources to locate your funds, you can use the following resources to get access to your unclaimed assets.