Find Lost 401k: How To Find Out If You Have Lost Or Forgotten Retirement Accounts
Here is a guide for how to find lost money a lost 401k or other unclaimed retirement benefits.
Finding a lost 401k or other retirement account is more tedious than metal detector treasure hunting,but perhaps more rewarding.
A few years ago, I received a strange notice in the mail: a former employer was discontinuing their retirement plan and I had 30 days to either roll my balance into a different account or receive a distribution from the plan. This sort of thing happens quite often when people change jobs and leave their retirement account in the old employers plan. The strange thing about this notice was, I had no idea Id been participating in the plan while I worked there!
Could the same thing have happened to you? If youre looking for ways to increase your retirement savings, you just may want to look for lost or forgotten retirement accounts.
A National Database To Find Forgotten 401s And Pensions Could Be On The Way But Savers Should Take Action Now To Locate Any Missing Retirement Accounts
At a time when many Americans are worried that they wont have enough money to retire comfortably, thousands have lost track of billions of dollars in savings.
There are more than 24 million forgotten 401 accounts containing some $1.35 trillion in assets, according to a report from Capitalize, which helps workers roll over their retirement plans when they change jobs. Companies are also holding on to billions in unpaid pension payments earned by former employees.
The problem is so widespread that Congress is considering legislation to address it. SECURE Act 2.0, which includes a wide range of benefits and protections for retirement savers , would create a national online lost-and-found database to help people track down these orphaned plans.
Brian Stivers, owner of Stivers Financial Services, in Knoxville, Tenn., says he typically meets one to two new clients a month who are in this situation. Most of the time, theyve changed jobs and forgotten about an old plan, usually because it had a small balance. Retirement plans are also misplaced when one spouse dies and the survivor is unaware of accounts with his or her former employers.
Retirement Goals By 30
While you should start saving by age 30, your actual saving goals are likely subject to change around this time. Many people use their 20s to figure out who they are and what they want and to settle into the workforce.
They also usually lack the same responsibilities that encourage people above the age of 30 to focus on their retirement, such as marriage or a family. So, they might not have the same means or motivation to create a structured plan yet.
Still, its essential to start saving as soon as you possibly can, even if you dont have a strict schedule yet. Even a small amount can help you build significant wealth at this time since you can take advantage of compound interest.
Small, regular contributions can build over the decades into a valuable resource during your senior years.
There are also a few things you should have already started on. For example, experts usually recommend creating an emergency fund in the case of an unexpected cost or job loss.
This tends to be around three to six months worth of living expenses, which you can store in a high-yield savings account. You should also have established credit by this time and begun buying life and health insurance policies.
Here are some of the most popular benchmarks for this age group:
- Fidelity Investments Benchmark: 1X your starting salary
- J.P. Morgan Asset Management Benchmark: 0.8X your annual income
- Rowe Price Benchmark: 0.5X your annual income
Also Check: How Much You Should Contribute To 401k
What Is The Retirement Savings Contribution Credit
The U.S. has a special tax credit designed to help lower-income Americans save for retirement. It’s called the Retirement Savings Contribution Credit or “Saver’s Credit.” For those who earn less than $33,000 annually , you may qualify for a tax credit of 10%, 20%, or 50% of your retirement contributions. This tax credit applies both to pre-tax contributions, like those made to a 401 plan, as well as post-tax contributions, like those made to a Roth IRA.
Keep It With Your Old Employer’s Plan
One of the simplest things you can do with your old 401 account is to just leave it right where it is this requires no further action on your end.
“Most companies allow you to do this so your money continues to grow in the investment option you selected ,” said Jessica MacDonald, the Vice President of Thought Leadership at Fidelity. And, you’ll still be able to make withdrawals penalty-free once you hit age 59 1/2.
Just keep in mind, though, that if you have an account balance of less than $5,000, the account may be rolled over into an IRA.
Another reason you may opt to keep your money in your old employer’s plan is if you just really liked the investment options it provided. Some employers may provide more access to certain types of 401 investments, like a wider range of mutual funds rather than just a target date fund.
However, there are a few potential downsides you should be aware of when deciding to go this route. For starters, you typically won’t be able to make additional contributions to this plan once you switch jobs. And, the plan administrator for your old employer may charge additional fees for bookkeeping, administrative charges and legal fees to continue managing the account.
And, you would be unable to take out a 401 loan on your balance.
Recommended Reading: How To Lower 401k Contribution Fidelity
How To Get My Retirement Money From An Old Employer
Your employer may allow you to leave your existing balance in your old 401 account. But you cannot continue contributing to your old plan after you leave your job. Still, it can be particularly helpful in cases where mutual funds charge your company lower management fees than what they would charge you as an individual investor.
Transferring your money to an IRA or rolling it over to your current employer also has advantages. It gives you more options in terms of investments and more flexibility in terms of account fees.
There are several ways to track your old 401 account. However, depending upon how old your account is, the process can be cumbersome and time-consuming. Its always better to move your account with your new employer or transfer the money to the IRA.
Do you need more help tracking your old 401 plan? Contact us today for expert advice.
The Human Interest Team
We believe that everyone deserves access to a secure financial future, which is why we make it easy to provide a 401 to your employees. Human Interest offers a low-cost 401 with automated administration, built-in investment advising, and integration with leading payroll providers.
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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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.
Call Your Old Employer
If you suspect you have missing 401 funds or even if you’re not sure, it’s still a good idea to contact old employers and ask them to check if they’re holding your old account. Your former company will have records of you actually participating in a 401 plan.
You’ll either need to provide or confirm your Social Security number and the dates of your employment, but if you can, you’ll have found the fastest way to dig up a missing 401.
Recommended Reading: How Do I Withdraw Money From My 401k
How To Find Old 401s
A 401 plan helps you save for your retirement. However, because these plans are employer-specific, the money doesnt transfer automatically when you change your job. The money either continues to remain in your old 401 account or goes into unclaimed funds of the state government if you do not transfer it to your new account.
Apart from brokerages and savings and checking accounts, most of the unclaimed funds come from a 401, annuities, and retirement accounts. The law requires companies to send unclaimed 401 funds to your address. However, if the funds cant be delivered, they are handed over to the state.
What To Do With A Lost Retirement Account When You Find It
Once youve found a lost retirement account, what you do with it depends on what type of plan it is and where its located.
Old 401k balances can be rolled into your current employers plan or rolled into an IRA in a trustee-to-trustee transfer. You can also request a payout of the plan balance, but if you are under the age of 59.5, the payout will be subject to income taxes and a 10% penalty for early withdrawal.
If you find an old pension through the PBGC, youll have to go through a process to verify your identity. Once the PBGC has established that you are owed the benefits, you can apply for them at any time once youve reached retirement age.
Its not uncommon for former employees to leave funds in a former employers retirement plan, believing theyll get around to dealing with it later. Years pass by, and maybe youve forgotten about a few old accounts. Even if they didnt amount to much at the time, a few hundred dollars here and there combined with some market growth over the years just might add up to a nice addition to your retirement savings. Its worth a look!
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Contact Your Former Employer
The first place you should look is your prior employer. Contact their human resources department. There, they should have all of the information as to the whereabouts of the 401 account you had with them.
They should send you the proper paperwork and be able to facilitate the transfer of your funds to whatever account you choose.
If they are unable to locate any information on your account, they should be able to provide you the contact information of the administrator who handled your 401 on their behalf.
Let the administrator know your situation, and just like the HR department, should be able to assist you in moving your money properly.
Cashing Out A 401 Is Popular But Not So Smart
Intellectually, consumers know that cashing out retirement accounts isnt a smart move. But plenty of people do it anyway. As discussed, you may be forced out of your former plan based on your account balance, but that doesnt mean you should cash the check and use it for non-retirement related purposes. In the long run, your financial future will be better served by rolling the money over into an IRA or if applicable, your new employers 401 plan.
A 2020 survey by Alight, a leading provider of human capital and business solutions, found that 4 out of 10 people cashed out their balances after termination between 2008 and 2017. About 80 percent of those who had an account balance of less than $1,000 cashed out, while 62 percent who had balances between $1,000 and $5,000 did the same.
Based on historical rates of return, a $3,000 cash out at age 24 leads to a $23,000 difference , in your projected account balance at age 67, so even a small amount of money invested into a retirement vehicle today can make a big difference in the long run.
Also Check: How To Transfer 401k Without Penalty
How Does Money Get Left Behind
Very few people stay at one employer the entire length of their career.
But unlike your bank account which you may have from job to job, a 401 account is linked to your employer. It is up to you to do something about it.
When you leave your employer, the money may stay in the account for an indefinite amount of time.
However, if the company closes the 401 plan, files for bankruptcy, goes out of business or is acquired by another company, you may be forced to decide, within a short period of time.
Its possible that years will go by after you parted ways with your old job, and then youll get a letter notifying you that you need to move your 401 account, or take a distribution.
If this happens, youre much better off rolling the money into an IRA account, or transferring the money into your current companys 401 plan.
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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Check The National Registry Of Unclaimed Retirement Benefits
The National Registry is a nationwide, secure database listing of retirement plan account balances that have been left unclaimed by former participants of retirement plans.
It is essentially a search engine of lost 401 plans.
The only thing you need to search the database is your social security number. No additional information is needed, and there is no cost to search the database.
Options For Your Old 401
Whether you are retiring or leaving a job for other reasons, it is important to make informed decisions about your retirement savings options. This video will help you learn how to evaluate your situation and assist you in making the most of what youve saved.
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Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
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Also Check: Should I Rollover My 401k When I Retire
Questions To Ask Yourself Before Retiring
As you plan, consider these important questions:
At what age do you plan to retire?
Can you participate in an employer’s retirement savings plan? This includes 401 plans and traditional pension plans.
If you have a spouse or partner, will they retire when you do?
Where do you plan to live when you retire? Will you downsize, rent, or own your home?
Do you expect to work part-time?
Will you have the same medical insurance you had while working? Will your insurance coverage change?
Do you want to travel or pursue a costly, new hobby?