How To Track 401k From Previous Jobs

Why You Should Recover Your Old 401

Theres a simple reason why you should attempt to recover a lost 401 account: Its your money. Whether your old 401 plan holds a lot of money or a little, every penny counts when staying on track with your retirement savings.

Another important point to consider: If youve changed jobs multiple times, its possible that you could have more than one lost 401 and taken together, that money could make a surprising difference to your nest egg.

Last, if you were lucky to have an employer that offered a matching 401 contribution, your missing account may have more money in them than you think. For example, a common employer match is 50%, up to the first 6% of your salary. If you dont make an effort to find old 401 accounts, youre missing out on that free money as well.

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.

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 401 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.

Also Check: What To Do With A 401k Rollover

Finding Your Old 401k: Here’s What To Do

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Ever wish you could click on an app called Find my 401? Its surprisingly easy to lose track of a 401 account when you change jobs or careers. The good news: The money isnt gone, and there are ways to reclaim your missing account.

The quickest way to find old 401 money is to contact your former employer to see where the account is now. Its possible that your lost 401 isnt lost at all instead, its right where you left it. In some cases, however, employers may cash out an old 401 or roll it over to an IRA on behalf of a former employee. In that case, you might have to do a little more digging to find lost 401 funds.

If you need to rescue an unclaimed 401, heres what you need to know.

What Can You Do With Your Old 401 Account Once You Find It

Once you’ve located your 401 account from a former employer, you have a few choices about what you do with your money.

Roll it over into your current 401: Most 401 accounts can be “rolled over,” meaning that the funds in them can be transferred to another retirement account. If your current employer offers a 401 that allows rollovers, you can shift your funds from your old account to your new one and enjoy a nice bump in your balance.

Roll it over into an IRA: If your current employer doesn’t offer a 401 plan or doesn’t allow rollovers, you can transfer the money from your old 401 into an existing or new IRA.

Pro tip: If your old 401 provider wants to roll over your funds by sending you a paper check, make sure you communicate that you want a direct rollover with a check made out to your new 401 provider or IRA institution. If the check is made out to you personally, that could trigger a required 20% withholding for taxes and potential IRS penalty.

Cash it out: You can take the funds from your forgotten 401 and turn it into money you can spend now, but you’ll pay a big penalty. The IRS will tax your distribution and charge you 10% of your 401 balance for cashing out before age 59 and six months .

Leaving it with your old employer might be a reasonable decision if you don’t like your new company’s plan, but you’ll be left with the complications of managing multiple 401s instead of one.

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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 websites 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.

Too Complicated Get Some Help

If this process seems like a lot of work, youâre not alone. Locating your old 401 accounts and finding the proper place to transfer them to can get confusing.

Fortunately, Beagle can do all of the difficult work for you. The tasks of finding your accounts and facilitating their transfers are all done for you. Getting started is easy.

Read Also: What Does A 401k Match Mean

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 Are Your Options For Old Retirement Plans

You generally have four options for dealing with money thats in an employer-sponsored retirement account when youre no longer working at the company:

• Leave the money where it is: Although you might not be able to contribute to the account any longer, you may be able to leave the money in your former employers plan. Sometimes, you may need to meet a minimum account balance to qualify, such as $200 for a TSP or $5,000 for some 401s.
• Transfer funds to a new employer-sponsored plan: If you have a new job with a company that sponsors a retirement plan, you may be able to roll over the money into your new employers plan. When this is an option, compare the previous and new plans fees, terms, and investment options to see which is best.
• Roll over to an individual retirement account: You can also move the money into an individual retirement account . An IRA may give you more control as you can choose where to open the account and invest in a wider range of funds. Its also fairly easy to move from one IRA to another as the account isnt tied to your employer. However, IRAs could have more fees, especially if you dont have a lot of assets and dont qualify for lower-cost investment funds.
• Cash out: You can also take the money out of retirement accounts completely. But unless youre 59½ or older , you may need to pay a 10 percent early withdrawal penalty in addition to income taxes on the money.

Recommended Reading: What Happens To Your 401k When You Die

Can I Cash Out My 401 While Still Working

One of the most common questions I get asked is whether or not you can cash out your 401 while still working. The answer is yes, but there are some important things to keep in mind before you do.

• First, you will likely have to pay taxes on the money you withdraw.
• Second, you may be hit with a 10% early withdrawal penalty if you are younger than 59 ½.
• And finally, remember that once you cash out your 401, the money is gone for good you cant put it back in.

With that said, there are some situations where cashing out your 401 while still working makes sense. For example, if you are facing financial hardship and need the money to cover essential expenses, or if you leave your job and dont want to roll your 401 into a new employers plan. Just be sure to weigh all of your options carefully before making a decision.

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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Locate Your Lost 401 And Organize Your Financial Life

Its important to locate your lost 401s so that you can maximize your retirement savings. Even if the amount may seem small, you dont want to lose out on unclaimed money. Consolidating your old accounts into a new plan can help you organize your financial life and give you a clearer picture if you are on track for retirement. Make sure that you plan next time you switch jobs so that you dont lose track of your funds. If you want help with your finances and are interested in having a comprehensive financial plan, feel free to schedule a discovery call with one of our financial advisors today!

How 401 Rollovers Work

If you decide to roll over an old account, contact the 401 administrator at your new company for a new account address, such as ABC 401 Plan FBO Your Name, provide this to your old employer, and the money will be transferred directly from your old plan to the new or sent by check to you , which you will give to your new companys 401 administrator. This is called a direct rollover. Its simple and transfers the entire balance without taxes or penalty.

Another, even simpler option is to perform a direct trustee-to-trustee transfer. The majority of the process is completed electronically between plan administrators, taking much of the burden off of your shoulders.

A somewhat riskier method is the indirect or 60-day rollover in which you request from your old employer that a check be sent to you made out to your name. This manual method has the drawback of a mandatory tax withholdingthe company assumes you are cashing out the account and is required to withhold 20% of the funds for federal taxes. This means that a $100,000 401 nest egg becomes a check for just $80,000 even if your clear intent is to move the money into another plan.

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Search The National Registry

Still not having any luck? Past employers may list you as a missing participant if you no longer work for the company but left your 401 behind. The National Registry of Unclaimed Retirement Benefits is a nationwide, secure database listing retirement plan account balances that have been left unclaimed .

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Can You Lose Your 401 If You Get Fired

There are two types of 401 contributions: Employers and employees contributions. You acquire full ownership of your employers contributions to your 401 after a certain period of time. This is called Vesting. If you are fired, you lose your right to any remaining unvested funds in your 401. You are always completely vested in your contributions and can not lose this portion of your 401.

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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. Weve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.

Bankrate follows a strict editorial policy, so you can trust that were putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.

Our reporters and editors focus on the points consumers care about most how to save for retirement, understanding the types of accounts, how to choose investments and more so you can feel confident when planning for your future.

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Pros And Cons: 401 Vs Ira

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.

Recommended Reading: How Can I Get My 401k Money Without Penalty

What Happens To Forgotten 401 Plans

The state of your misplaced 401 account depends on how much money you have in it.

If a 401 account for a former employee holds less than $1,000, the company is allowed to cash it out and send a check to your mailing address. If you’ve moved, contact your former company to see if a check was sent. If you can’t contact your former employer, you’ll need to reach out to the new residents at your old address or search your state’s database for unclaimed property.

If your account had a balance of $1,000 to $5,000, your former employer is allowed to transfer your funds into a new IRA. Again, contact your old company to learn how to access that new account.

Accounts holding more than $5,000 are still likely to be managed by the 401 plan administrator of your former company.