Uncovering Forgotten 401(k)s
The average person has between 10 and 16 jobs in their lifetime, according to a 2019 U.S. Bureau of Labor Statistics survey. Millennials and Gen Z are changing jobs more frequently than Baby Boomers did. The changing culture, economy, job market, working from home opportunities, and major events like COVID-19 are all catalysts for a new job or career change.
Amongst the chaos and excitement from moving from place to place, it is easy to accidentally leave an old retirement account behind. It might sound crazy that somebody could forget about savings they worked so diligently on to build up for so long. Amazingly, it’s not crazy at all. In fact, more than $1.7 trillion dollars sit in lost or forgotten 401(k) accounts across the U.S. That is over 29 million lost accounts, representing 25% of all 401(k) plans. Those are HUGE numbers!
As a part of the SECURE 2.0 Act in 2022, a tool to help individuals find and recover missing retirement accounts was created called the “Retirement Savings Lost and Found Database.” This tool allows users to search for retirement plans that were sponsored by private-sector employers and unions that are linked to their Social Security numbers.
These plans include:
- Defined benefit-pension plans, which guarantee lifetime monthly payment options or can be taken as a lump-sum payment at retirement.
- Defined-contribution plans such as 401(k)s that are funded primarily through each employee’s account during their working years.
For the time being, the website can’t help with finding IRAs, or plans sponsored by the government or religious organizations.
To check if you have any lost retirement accounts, follow the steps below:
- Go to lostandfound.dol.gov
- Create an account which will be verified by:
- Legal first and last name
- Date of birth
- Social Security number
- A mobile device
- Front and back photo of an active driver’s license
- Cross your fingers and say out loud “Big money, big money!”
The search results will show that you participated in a retirement plan at some point, however it is possible the benefits have already been paid out, rolled over into another retirement account, or provided as an annuity. If you are unsure, you can contact the plan administrator who can tell you if you still have benefits to claim.
If your 401(k) plan no longer exists, it is still possible that your money may be held in your state’s unclaimed property fund. MissingMoney.com is another website run by states and the National Association of Unclaimed Property Administrators (NAUPA). All you need to do is enter your name and state to see what comes up. Even if it’s not an old 401(k) plan, you still might find some other little treasures that are owed to you!
Going through this process only takes a few minutes and could be well worth your time, possibly even shifting the course of your retirement strategy. If you find that you have unrecovered funds and need guidance regarding what to do with your old retirement account, reach out to your advisor at Meridian and we will be happy to guide you through it.