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If you’ve ever changed jobs in the past – as most Americans have done multiple times – you may have left some money in your 401(k) plan. The money in 401(k) plans does not automatically follow a person from one job to another. If you want to keep your money, you have to actively move it. But many Americans don’t understand what they have to do to keep their money or even if they’re actually entitled to it.
As a result, according to data from financial services firms Making original$1.7 trillion or more is currently in lost or forgotten 401(k) plans, which is an incredible 25% of all money held in 401(k) accounts. Spread across more than 29 million accounts, the average unclaimed balance is $56,616. How can this be possible? And how can you find out if any of that money is yours? Read on to find out.
How to miss money in 401(k) plans
Changing jobs can be stressful, even if it’s by your own choice. In addition to the stress of transitioning to a new work culture in a new environment, you may have to relocate, potentially put your children in a new school or buy or rent a new home. Even without that added stress, dealing with your former 401(k) plan may be one of the last things on your mind when you take a new job.
Even if you know you left some money behind, you may feel like bringing a relatively small amount of money is too much of a hassle – or you may even think that it won’t be your money anymore after you leave the company. The bottom line is that there are a number of reasons why some Americans leave 401(k) money behind.
How can the balance be so big
While some Americans may leave behind $50,000, $100,000 or more in account value, the truth is that most employees who “forget” or leave behind 401(k) money actually leave behind only a few thousand. But over a period of years or decades, those small sums – usually invested in stocks – can add up quite quickly.
Imagine a scenario in which you leave behind $9,000 in a 401(k) plan that is invested in the S&P 500 Index. according to nasdaqFrom 2010 to 2025, the S&P 500 returns an average of 13.8% per year. If you had left $9,000 in the 401(k) plan over those 15 years, it would have grown to $70,485. It may have occurred to you that the relatively small amount of $9,000 would now be worth almost eight times as much.
What can you do to recover lost money?
Luckily, there are some concrete steps you can take to see if any of your 401(k) money is lost. Here is a list of resources you can use in your search USA Today: :
- National Registry of Unclaimed Retirement Benefits: Simply enter your Social Security number to begin your search.
- Retirement savings lost and database found: This is a Department of Labor website that is slowly expanding its reach to find lost consumer property.
- Missing money: This database covers a wide variety of “missing” assets in both the United States and Canada, including 401(k) and retirement plan accounts.
In addition to checking websites for missing money, you can be proactive and do your own research. See if you have any old pay stubs or account statements to remind you of any past contributions you made. Have the information on hand when you contact the human resources departments of your former employers for assistance in the search.
Understand that if you had less than $1,000 in your previous 401(k) plan, your plan administrator likely closed the account on your behalf and sent you a check. It is possible that you may have cashed the check a long time ago and have forgotten about it. However, it may also be the case that the check is sent to an inappropriate address. In any case, it is advisable to talk to your former plan administrator to find out the final disposition of that money.