Don’t Leave Money Behind: Finding Your Missing 401(k)s

You've worked hard throughout your life to build assets to support your retirement. As financial professionals, one of the most critical functions we provide is helping clients determine their retirement income needs and structuring a withdrawal strategy that works for them. But you can’t develop a comprehensive strategy without knowing where all your assets are, including any “lost” 401(k) accounts you may have forgotten.

Surprisingly, losing track of an old 401(k) happens more often than you might think. As of May 2023, there were over 29 million "left-behind or forgotten" 401(k) accounts in the U.S., holding nearly $1.65 trillion in assets.1

Whether or not the balance of a forgotten account is large, no one wants to “leave hard-earned money on the table.”

Multiple jobs could mean multiple retirement accounts

It's easy to understand how 29 million accounts were left behind. According to the Bureau of Labor Statistics, Baby Boomers born between 1957 and 1964 held an average of 12.4 jobs before the age of 54.The first 401(k) program was implemented in 1981, and by the year 2000, more than three-fourths of American workers were participating in a 401(k). Those reaching retirement age in recent years were among the early participants in these accounts.

The more accounts you acquire over your working life, the more challenging it can be to keep track of them all. You also may have moved several times throughout the years, making it difficult for plan administrators to contact you. If accounts are left unattended for a period of time, they can be transferred to the state as unclaimed property.

1 Capitalize, June 23, 2023. Once you reach age 73, you must begin taking required minimum distributions (RMDs) from your 401(k) or any other defined contribution plan in most circumstances. Withdrawals from your 401(k) or any other defined contribution plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.

2 Charles Schwab, August 22, 2023

3 Britannica Money, October 12, 2024

4 U.S. Department of Labor, November 11, 2024

5 Smart Assets, September 6, 2024

6 ThinkAdvisor.com, July 1, 2024