Most people will have several different jobs throughout their careers, and switching jobs is even more common in a volatile economy. More than half of Americans said they were somewhat or very likely to look for a new job in the next year as they are prioritizing flexibility, remote work and higher pay, according to a recent Bankrate survey.
When you have changed jobs during your career, it’s possible that you left behind a 401(k) plan when shifting between employers.  If you’re wondering how to find an old 401k from a previous employer from your last job, you’re not alone — Americans forget approximately 24.3 million 401(k) plans with approximately $1.35 trillion in assets, according to a report by Capitalize. It’s quite costly for those who forget. Leaving behind a 401(k) account can cost an individual, in some cases, hundreds of thousands of dollars in foregone retirement savings over a lifetime due to potentially keeping a higher-fee plan and having poorly allocated investments. But don’t worry, it’s not too late to retrieve what’s yours.
Before you get started, it’s a good idea to confirm that you contributed to a 401(k). If you are unsure, you can check previous years’ tax returns and old W-2s. Any contributions will be in Box 12 of a W-2.
How to Find a Lost 401(k) Plan from Past Jobs
Losing track of a 401(k) plan from a previous job is more common than you might think. Whether due to a job change, a company merger, or simply time passing, recovering your funds is possible with a few clear steps.
1. Locate Previous Plan Statements
Start by locating any previous plan statements you may have, as these documents will provide essential information such as your account number and the plan administrator’s contact information. These statements might have been physically mailed to you or filed away in your email inbox or cloud storage. Finding these is often the easiest way to identify your lost 401(k) account quickly.
2. Contact Former Employers
If you don’t have any previous plan statements, the next step is to contact your former employers directly and request information about your retirement accounts. When reaching out, be prepared to provide your personal information, including your full name, Social Security number, and dates of employment. The Human Resources department should be able to determine whether you participated in their 401(k) plan and guide you toward recovering the account.
3. Search Unclaimed Property Databases
If your previous employer is unable to help or the company has gone out of business, there are online databases that can help you determine whether your retirement benefits have been transferred to state unclaimed property accounts. These accounts are managed by the states where you lived or worked and may hold your rightful benefits.
4. Use the National Registry of Unclaimed Retirement Benefits
The National Registry of Unclaimed Retirement Benefits is a secure online tool designed to assist both employers and former employees. As an employee, you can perform a free database search to see if you are entitled to any unpaid retirement account money. Likewise, employers can register the names of former employees who left money behind, which adds another layer of visibility for lost funds.
5. Check for a Default Participant IRA
If your lost account was worth between $1,000 and $5,000, your former employer might have rolled the funds into a default participant IRA on your behalf. These default IRAs are often set up when a former employee doesn’t respond to a distribution request. You can search FreeERISA, a resource offering free access to retirement-related documents, to investigate 401(k) and IRA accounts associated with your name.
6. File or Search Form 5500 with the Department of Labor
The U.S. Department of Labor (DOL) provides tools to file, search, and review Form 5500, which is an annual report filed for employee benefit plans. This form may contain valuable details about your plan provider, account type, or contact information, and can be an important resource when tracking down a lost 401(k) plan.
7. Search the U.S. Pension Guaranty Corporation Database
Lastly, the U.S. Pension Guaranty Corporation (PBGC) maintains a searchable database of missing participants from underfunded or terminated pension plans. If your former employer terminated their plan or the business was taken over by PBGC, this tool may help you reconnect with your retirement funds.
Next Steps to Maximize Your 401(k) Funds
Once you’ve located your previous plans, work with your financial advisor to roll the funds over to a specified 401(k) or IRA account, preferably somewhere you already have an account. Your advisor should also contact the previous 401(k) provider to ensure the money is sent to the receiving financial institution and doesn’t land in your account first. According to an article by AARP, this incorrect action could result in a mandatory 20% tax withholding on the funds distributed.
The next key step is to consolidate all of your retirement accounts. It can be difficult to create a cohesive investment strategy when funds are held at multiple locations. By having all of your funds consolidated into one account, you can more easily keep track of your balance and account performance. Your previous 401(k) plan also may not be geared toward your current financial goals, so this is a great time to devise a better-suited plan that meets your needs.
Overall, finding lost or forgotten 401(k) accounts may seem daunting, but it’s important to maximize your retirement savings. Every penny counts, so you don’t want to let hundreds or thousands of dollars go unclaimed. Your financial advisor can help guide you through the process or provide more resources if you hit a dead end.
Check out our retirement planning playlist for more tips on getting the most from your benefits.
Consult a Konza Global Wealth Advisor
In addition to helping you locate your lost funds, we can help you find another potential windfall. If stock contributions make up any part of a past or current 401(k) plan, there are potential tax savings (i.e., extra retirement income that is too often hidden just because we haven’t been told where to look). Depending on your plan tenure, the tax impact on your retirement funds could be pleasantly significant.
When developing a retirement plan strategy, we provide a transformational assessment process that balances the financial responsibilities of daily living and those needed to fulfill your dreams. And, it will change your approach to meeting your financial goals. We start with thoroughly getting to know which priorities are critical to you. It may be retirement concerns, how to fund college costs for your children or simply getting a workable plan to reduce or eliminate debt. Our industry-leading software will then identify your unique risk tolerance by analyzing your actual financial resources rather than generalized information.
Contact a Konza Global advisor to learn more about how we can assist you in finding old, lost or unclaimed benefits. Our team of experts is equipped to help you every step of the way. Email us at info@konzaglobal.com or scan the QR code below. Follow our YouTube channel and other social media accounts for more financial planning tips.
Frequently Asked Questions
What if my employer went out of business?
Under federal law, your employer must keep your 401(k) funds separate from their business assets, meaning your money is protected. It can’t be used to pay off your company’s loans, to cover payroll or for any other purpose.Â
How do I roll my 401(k) to my new employer?
If your new employer allows for a rollover, you can choose a direct or indirect option. A direct rollover is usually the best option. You file a form letting your old plan administrator know where to send the funds, and they take care of it for you. An indirect rollover is when your old 401(k) plan administrator writes you a check for the funds in your account and you deposit that into your new account. It’s important to do this within 60 days of cashing out your old account because if you wait longer, the government will consider it a distribution and will tax you on the money.Â
What can I do with an old 401(k) once found?
Cash it out: This is also known as a withdrawal. It allows you to get a check with the money you saved in your account, but you’ll pay taxes and penalties on it if you’re under the age of 59 1/2.Â
Leave it in the old account: Some plans allow you to leave the funds in the account even after you’ve left a job. It can be a viable option if you like the investment options and are comfortable with the fees in that account. However, you will want to keep track of it in case your previous employer changes providers.
Roll it over into an IRA: A rollover is a tax-free transfer of your savings from one retirement account to another. It is an open account that is not tied to your employer.
Roll over your old account into a new account: While most choose to move their old 401(k) into an IRA, you can also move it into a new account you have with a current employer if they allow it.
Important Note
This material is provided for educational purposes only and does not constitute investment advice. The information contained herein is based on current tax laws, which may change in the future. Konza Global Advisors cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. The information provided in these materials does not constitute any legal, tax or accounting advice. Please consult with a qualified professional for this type of advice. The information provided above is obtained from publicly available sources and is reliable. However, no representation or warranty is made as to its accuracy or completeness.
