Find That Lost 401(k)!
Do you have a long-lost retirement account left with a former employer? Maybe it's been so long that you can't even remember? With over 24 million "forgotten" 401(k) accounts holding roughly 1.35 trillion in assets, even the most organized professional may be surprised to learn of their unclaimed "found" money. 1
What are "Forgotten" Retirement Accounts?
Considering that those 60 and older have worked an average of 12 jobs in their lifetimes, it can be all too easy for retirement accounts to get lost in the shuffle.2 Think back to your first job, can you remember what happened to your work-sponsored retirement plan? If you're even slightly unsure, then it's time to go looking for your potential "forgotten" funds.
Retirement Plan Account Types
Before you begin your search, let's touch on the types of work-sponsored retirement accounts available. This is by no means an exhaustive list, but the following are the most common retirement accounts.
- 401(k) - This is a company-sponsored retirement plan that allows employees to contribute a portion of their wages to individual accounts. Some employer plans include automatic enrollment for new employees, so it's possible you've contributed money without even being aware of it.3
- 403(b) - This is a retirement plan offered by public schools and certain 501(c)(3) tax-exempt organizations. Just as with a 401(k) plan, a 403(b) plan lets employees defer some of their salary into individual accounts. The deferred salary is generally not subject to federal or state income tax until it's distributed. If you've ever been employed by a public school, college, university, church, or non-profit, you may have been offered a chance to participate. 4
- Defined Benefit Plan - Sometimes know as a traditional pension, a Defined Benefit Plan promises the participant a specified monthly benefit at retirement. Often the benefit is based on factors such as the participant's salary, age, and number of years worked for the employer. 5
Once you reach age 73, you must begin taking required minimum distributions from your 401(k), 403(b), or other defined-contribution plans in most circumstances. Withdrawals from defined-contribution plans are taxed as ordinary income and, if taken before the age of 591/2, may be subject to a 10% federal income tax penalty.
Starting Your Search
One of the best ways to find lost retirement accounts is to contact your former employers. If you're unsure where to direct your call, the human resources or accounting department should be able to check their plan records to see if you've ever participated. However, you will most likely be asked to provide your full name, Social Security number, and the dates you worked, so be sure to come prepared.
If your former employer is no longer around, look for an old 401k statement. Often these will have the contact information for the plan administrator. If you don't have an old statement, consider reaching out to former coworkers who may have the information you need.
Even if these first steps don't turn up much info, they can help you gather important information.
Online Resources
The U.S. Department of Labor - The department of labor tracks plans that have been abandoned or are in the process of being terminated. Try searching their database to find the Qualified Termination Administrator (QTA) responsible for directing the shutdown of the plan.7
While there are lots of websites that offer to check for your 401(k), be cautious around any website that asks for your social security number and other personal identifying information.
What's Next?
Once you've found your retirement account, what you do with it depends on the type of plan and where it's held. Your location also matters. Depending on where you live, rules and regulations may differ.
No matter what you decide to do, be sure to involve your tax and financial professionals since they'll be informed on current regulations for your state. They can also help you identify a strategy for your newfound money: travel, investment, maybe that vacation home you've always anted. You worked hard for that money, after all, so you should get to enjoy it!
Embrace. Educate. Empower.
At hemming& our mission is clear: A clear understanding of what's important to you. A well designed road map to achieve your goals. Ongoing advice to help you adjust and move forward.
- https://www.kiplinger.com/retirement/retirement-plans/401ks/603334/how-to-find-a-lost-retirement-account
- https://money.usnews.com/money/retirement/401ks/articles/what-are-unclaimed-retirement-benefits-and-how-to-find-them
- https://www.irs.gov/retirement-plans/401k-plans
- https://www.irs.gov/retirement-plans/irc-403b-tax-sheltered-annuity-plans
- https://www.irs.gov/retirement-plans/defined-benefit-plan
- https://unclaimedretirementbenefits.com
- https://www.askebsa.dol.gov/AbandonedPlanSearch/