Gone are the days when employees spent their entire careers with a single company. It’s much more prevalent during the course of a career, especially among younger generations, to move from job to job. However, amidst all this career movement, retirement funds often get left behind. This amounts to millions of 401(k) accounts and trillions in assets essentially being abandoned by former employees.
If you contributed to a former employer’s 401(k) plan, and want to track down your lost retirement funds, the first step is to get in touch with the plan’s administrator. This can be challenging if you don’t remember the company managing the plan or have the right contact information. In that case, reach out to your former employer’s human resources department.
If the company no longer exists due to bankruptcy, acquisition, or merger, federal law mandates that 401(k) plans file paperwork with the government. You can search for your former employer on the Department of Labor’s website to find updated contact information https://www.efast.dol.gov/5500search/.
Once lost retirement funds are located, there are several options to consider. An old 401(k) still with a former employer can be left untouched. However, this may lead to neglecting the account and potentially mismanaging it. Additionally, no additional contributions can be made to the account.
Another option is to roll the account over into a current employer’s 401(k) plan or an Individual Retirement Account (IRA). Not all employers permit rollovers, so an IRA may be the only available choice. Consolidating all your 401(k) funds in one place can simplify management.
Cashing out your 401(k) should be viewed as a last resort due to potential early withdrawal penalties. It is generally advisable to avoid this option unless absolutely necessary.
By taking proactive steps to locate and manage your lost retirement funds, you can ensure that your hard-earned savings are properly accounted for and continue to grow towards your future financial security.