In our prior blog we talked about the idea of “New Year, New Me!” and how the season of renewal inspires us to live better lives.
Maybe for you, 2023 marks a “New Year, New Job,” and you’ve moved on to a chapter of your career at a new company.
Or your 2023 bucket list includes making a career change.
Either way, as you forge ahead on your journey, there’s one thing you don’t want to leave behind: your existing retirement accounts.
Leaving retirement accounts like 401(k)s or pension plans behind is more common than you’d think. According to Capitalize, a financial services firm specializing in 401(k)s, over 20% of 401(k) plans are lost or forgotten.
Often referred to as “orphaned retirement accounts,” these abandoned retirement plans mean you’ve literally left money on the table.
While the news may be shocking, it’s not a surprise, given the number of jobs Americans tend to hold. The Bureau of Labor Statistics reports that men held 12.6 jobs, and women held 12.3 jobs from age 18 to 54.
Which is why a job change presents an ideal time to take inventory of your retirement savings accounts.
Of course, it’s not the only time to do so. You might be reading along and thinking, “Wow, I should check to see if I’ve left any retirement funds at some of my old employers.”
If you’re content at your current job or moving on to the next one, there’s no better time than the present to uncover what we at the Kaspian Group refer to as “lost treasures.”
Tracking Down an Orphaned Retirement Account
Step 1: List prior employers
This may sound obvious, but it’s worth mentioning. Don’t rely on your memory to catalog where you’ve worked and whether you had a retirement plan there or not. Instead, create a list of past employers and Write your list down in a way that works for you; a notebook, a Word or Google document, or a spreadsheet.
Step 2: Find your funds
Once you have a list of your prior employers, start contacting them individually to determine whether they’re maintaining any accounts in your name.
It goes without saying, but you may run into roadblocks. For example, you may find that the company you worked for no longer exists because it merged with another.
If that’s the case, contact the plan administrator, which you can find on the Department of Labor’s website. Form 5500 will list the plan administrator’s contact information.
You can also check your state’s unclaimed property database via the National Association of Unclaimed Property Administrators.
Step 3: Take control
Once you’ve located your lost account, you’ll want to weigh your options and then coordinate one of the following with your former employer’s plan administrator:
- Rollover your old 401(k) into your current employer’s 401(k). If your new plan’s features, costs, and investment options align with your goals, a rollover to your current employer’s sponsored plan will make sense.
- Rollover your old 401(k) into an IRA (Individual Retirement Account). If you’d like to have options beyond the new plan’s offering, a rollover to an IRA may be a better option.
In either rollover scenario, it’s highly advised to perform a direct rollover so that funds are sent straight from your prior account to the new one without touching it to avoid tax implications and withdrawal penalties.
By now, you may be thinking, “Wow, that’s A LOT!” It can be, but it doesn’t have to be complicated, and you don’t have to do this alone. At the Kaspian Group, we work alongside clients to find orphaned assets and help them make the most of their long-lost treasures in alignment with their goals. Contact us at firstname.lastname@example.org to begin the process today.