An old retirement account can be easy to overlook after starting a new job. But while you focus on your next paycheck, fees and investment choices in a former employer’s plan may continue affecting the savings you left behind.
Keeping an old 401(k) is not necessarily a bad decision. The problem is leaving it unchecked. Reviewing its costs and investments can help you decide whether to keep it, transfer it or combine it with another account.
Worth reading: The State by State Guide to Unclaimed Assets
Why Forgotten Accounts Deserve Attention
Depending on the plan’s rules and your balance, a former employer may transfer a smaller account into an automatic-rollover IRA. These accounts commonly use conservative investments designed to preserve money rather than pursue long-term growth.
If returns are low and fees continue, the balance may grow slowly or decline. Check where your money is held, how it is invested and what you are paying. This guide to finding old 401(k) accounts explains how accounts can become difficult to track.
How to Find Your Old Retirement Savings
Start with your former employer’s human resources department. Ask which company administers the retirement plan and whether your account remains there.
If you need more help, use these resources:
Retirement Savings Lost and Found: A Department of Labor tool that helps locate retirement plans connected to your Social Security number.
Abandoned Plan Search: A separate database for plans undergoing termination or already terminated.
PBGC’s unclaimed benefits resources: A starting point for certain missing pension benefits.
MissingMoney.com: A search tool for state-held unclaimed property, which may include uncashed retirement distribution checks.
Should You Move the Money?
Once you locate the account, request its balance, investment details and fee schedule. You may be able to leave it in the existing plan, transfer it to a new employer’s plan or roll it into an IRA.
Compare costs, investment options and account protections before choosing. Consolidating accounts can simplify tracking, but an old plan may still offer features worth keeping.
A direct rollover can transfer eligible savings without paying the money to you first. Moving pretax funds into a Roth account, however, generally creates taxable income. Review the IRS rollover rules before proceeding.
Think Carefully Before Cashing Out
Withdrawing the money may mean income taxes and an additional early-distribution tax, depending on your age and circumstances. It also removes those funds from your retirement savings.
Whether you move the account or leave it where it is, update your contact information and review it regularly. Finding the money is the first step; making an informed decision about it is what matters next.
