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Lost in the Shuffle: How to Track Down Your Forgotten 401(k) Money

Are you one of the millions of Americans who have lost track of their 401(k) accounts? With the average worker holding 12 jobs during their career, it’s no wonder that an estimated $1.65 trillion is lingering in old 401(k) accounts. If you suspect you have forgotten 401(k) money out there, don’t worry – we’ve got you covered.

Understanding Your Options

When you leave a job, you typically have four options for your 401(k) or 403(b) plan:

1. Leave it behind: Most plans allow you to keep your money invested if your balance is at least $7,000. Your savings will continue to grow on a tax-deferred basis, but you can’t contribute to the account after you’ve left your job.
2. Roll it over: You can roll over your 401(k) or 403(b) into an individual retirement account (IRA) at a brokerage of your choice. If you have less than $7,000 in your account, your plan administrator can automatically roll over your balance into a safe harbor IRA.
3. Take it with you: If you get another job, you can usually roll over your 401(k) or 403(b) into your new employer’s plan, provided that their rules allow rollovers.
4. Cash out: The final option is to cash out your retirement account, but this typically isn’t recommended. Not only could you face taxes and penalties if you’re younger than 59½, but you’ll also miss out on tax-deferred growth.

Finding Your Forgotten 401(k)

So, how do you track down your old 401(k) accounts? Here are four strategies to try:

1. Contact past employers: Reach out to the company’s human resources department or the person who managed employee benefits to ask for the name of the plan administrator.
2. Search online databases: Several databases allow you to search for old 401(k)s, including the National Registry of Unclaimed Retirement Benefits, the U.S. Department of Labor’s Abandoned Plan Search, and MissingMoney.com.
3. Check your old W-2s: Look back at your old W-2s to see if you participated in a workplace retirement plan during the tax year.
4. Use private company tools: A handful of private companies, such as Beagle, Capitalize, and FreeErisa.com, offer tools to help you find your 401(k) and roll it over into an IRA.

The Future of 401(k) Tracking

The Secure Act 2.0 of 2022 directed the U.S. Department of Labor to create a searchable 401(k) finder on its website, known as the Retirement Savings Lost and Found database. While the tool is scheduled to launch by December 29, 2024, its usefulness may be limited due to concerns from plan recordkeepers and administrators.

What to Do Once You’ve Found Your 401(k)

After you track down your old 401(k), your options will depend on where your funds are located. You may be able to keep it there, roll it over into an IRA, or roll it over into a new employer’s plan. You can also withdraw your money, but this move can be extremely costly.

Avoiding Lost 401(k)s in the Future

To avoid losing track of old 401(k)s in the future, consider consolidating accounts when you leave jobs by rolling over the balance into an IRA or a new employer’s 401(k). You may find it easier to keep track of a single account.