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Americans change jobs, on average, about every four years over the course of their careers. And frequent job hopping provides the opportunity to leave behind, and forget about, old 401(k) accounts from former employers.
A 2021 study by fintech company Capitalize found that there are an estimated 24.3 million forgotten 401(k)s holding approximately $1.35 trillion in assets, with another 2.8 million left behind annually. Certainly, losing track of these employer-sponsored retirement plans when you job hop can become a costly mistake. According to Capitalize's study, an individual with a forgotten 401(k) account has the potential to forgo almost $700,000 in retirement savings over their lifetime.
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Think you may be one of the millions with forgotten 401(k) money floating around somewhere? Start by scouring your personal email or laptop for any old 401(k) 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(k) plan records to see if you were once a participant.
If you've tried contacting your 401(k) 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 (which is updated weekly) 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(k) 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.
The U.S. Department of Labor also has a searchable database for former employers who have gotten rid of their retirement plans, or are in the process of terminating.
Lastly, online services like Beagle track down all your old 401(k)s for you, and signing up only takes a few minutes.
Once you find forgotten retirement funds, you can make it easier to keep track of your money by simply rolling over your old 401(k) 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(k) 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(k) 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.
Minimum deposit and balance
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