Tracking Down a Lost 401(k)

It's easy to understand why some workers might lose track of an old 401(k): Those born between 1957 and 1964 held an average of 12.4 jobs before the age of 54, according to the Bureau of Labor Statistics. The more accounts you acquire, the more challenging it is to keep track of them all.

Perhaps that’s why there are some 24 million forgotten 401(k)s holding assets in excess of $1.3 trillion.¹ If left unattended for too long, old accounts can be converted to cash—and even transferred to the state as unclaimed property—forgoing their future growth potential.

SECURE 2.0 will establish a new searchable database on the Department of Labor website to look for lost retirement savings accounts, but we’re at least a couple of years away before such a database is established.

In the meantime, if you’re among those with misplaced savings, here’s how to locate and retrieve them:

1. Find your funds: Ask previous employers whether they're maintaining any accounts in your name. If the company no longer exists, contact the plan administrator. If you don't know the name of the plan administrator, search the Department of Labor website for the company's Form 5500, which will list its contact information. You might also check the state's unclaimed property database via the National Association of Unclaimed Property Administrators
2. Take control: Once you've located your lost nest egg, you'll likely want to consider either rolling it into your current employer's 401(k), if permitted, or into an IRA, depending on their relative fees and investment choices.
   
   Ask your former and new plan administrators about how to handle the transfer on your behalf. If you take possession of the funds yourself, you have 60 days to deposit them into a qualified plan—otherwise the IRS could treat your transfer as a distribution, which will be taxed as ordinary income and may also trigger a 10% early withdrawal penalty if you're not yet 59½.

The next time you switch jobs, be sure to have a plan for your retirement funds so you don't lose track of them. After all, when you're saving for a decades-long retirement, every dollar counts.