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It’s Getting Easier to Find Missing Retirement Money


American changes jobs more than 12 times on average during their careers — with women staying with each employer for an average of 3.8 years, while men stick around 4.3 years. That’s enough time in each of those jobs to qualify for a 401(k) or similar workplace retirement account, which would leave you keeping track of a dozen different accounts.

If you lose or forget one of those accounts finding it won’t necessarily be easy, but starting in 2025, you’ll get some help thanks to the recently passed Secure 2.0 Act. The new legislation gives the Dept. of Labor two years to create a searchable database that will serve as a retirement account “lost and found.”

In the meantime, you might want to start hunting down any orphaned accounts now.

For more help with retirement planning, consider working with a financial advisor.

 401(k) Basics for Job Changers

secure act lost 401(k)

If the balance was less than $1,000, your employer can simply cash you out, withhold taxes for the IRS and send you a check for the rest. If this happens, put that check into an IRA in less than 60 days and you won’t get hit with taxes and penalties that can chew up as much as half of your balance. You’ll also need to add enough cash to cover the amount your employer withheld to avoid the distribution counting as an early withdrawal with taxes and penalties. (You can get the withheld money back when you file your federal income tax return).

If you’re 59.5 years old or older, you can take the money as a taxable withdrawal, with no penalty.

If the balance was between $1,000 and $5,000, your plan sponsor can convert your forgotten account to an individual retirement account, often in a plan that will take out a chunk of fees every year. If the balance when you left was more than $5,000, your employer must leave the account alone unless you elect to roll it over to a new workplace account or into an IRA.

Lost 401(k) Accounts and How to Find Them

According to one estimate, there are 25 million 401(k) accounts that workers have left behind when they changed employers that are considered forgotten, with balances totaling $1.35 trillion in 2021.

To find a missing account, your best bet is to call your old employer. If your balance was moved to an IRA, the plan sponsor should be able to give you details to find and access that money. If your old workplace has closed or has no record of your account, you can check these sources, until that new Dept. of Labor database starts up.

When you do find your old account you have a few options. If the balance is still in your ex-employer’s plan you can leave it there. That’s an option if your new employer doesn’t offer a plan or if you prefer that plan. To simplify things, you can roll the old account into a new account at your current employer. This puts all your money in one place where you can manage and track it and can preserve your option to borrow against your plan balance.

If your money has been moved to an IRA, you can choose to leave it there or roll the account into a new or existing IRA of your own. Putting all your retirement money in place allows you to more easily monitor your investments and coordinate your investment choices.

In either case, request that the money be directly rolled into the account you choose so that you avoid needing to cover the withheld tax amount and the risk of seeing your transfer declared a withdrawal or if you’re younger than 59.5, an early withdrawal.

The Bottom Line

secure act lost 401(k)

If you change jobs frequently, you may rack up a lot of 401(k) accounts over the years. If you ever forget to take the money with you when you move along, there are ways to go back and find the recovered money — and it may soon get easier when the government creates a searchable data base.

Financial Planning Tips

  • A financial advisor can help you with retirement planning, regardless of how many accounts you have. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Use SmartAsset’s 401(k) calculator to see what it could be worth years from now — and if you need to make adjustments to reach your savings goal.

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