The great American worker sure moves around. In fact, U.S. career professionals nearing retirement have had an average of 12.7 jobs from ages 18 to 56, according to the U.S. Bureau of Labor Statistics.
That’s not a big issue from a career management point of view, as half of those job changes occurred from ages 18 to 24, the BLS notes. But what can be a problem is when a worker sheds a job and unknowingly leaves retirement benefits behind. This scenario is not uncommon.
A quarter of all 401(k) plan assets go lost and forgotten when employees leave their positions, according to Capitalize, a 401(k) services provider. In May 2023, there were 29.2 million lost retirement accounts holding a whopping $1.65 trillion in assets.
“In a worst-case scenario, an individual saver is at risk of missing out on several hundred thousand dollars in retirement savings from leaving behind 401(k)s throughout their career,” according to Capitalize.
Don’t let that happen to you. Take the steps needed to ensure you’re taking every dollar of your retirement benefits with you when you leave a job.
[Read: How to Find an Old 401(k) Account.]
What Are Unclaimed Retirement Benefits?
Unclaimed retirement benefits refer to retirement funds that workers have earned but have not accessed or rolled into another retirement account after leaving a job.
“These benefits can include 401(k) accounts, pension plans or other employer-sponsored retirement savings,” says Brandon Ashton, director of retirement security at Cornerstone Financial Services in Southfield, Michigan. “Workers should be aware of unclaimed retirement benefits because failing to locate and manage these funds can result in a loss of retirement income. It’s essential to track them down to ensure that you receive the retirement savings you’ve earned.”
Take these steps to identify and recover lost retirement funds.
1. Contact your former employer.
2. Check old workplace documents.
3. Search online for unclaimed retirement benefits.
4. Get creative if your ex-company went out of business.
5. Work with a financial advisor.
Contact Your Former Employer
Ashton recommends contacting your ex-employer’s human resources department or benefits administrator. “They can provide information on any retirement accounts you may have had with them,” he says.
Check Old Workplace Documents
Look through your old financial documents, pay stubs and tax returns to find any mention of retirement accounts or plans associated with your previous jobs, Ashton says.
While you’re at it, get ahead of a potential unrecovered retirement account situation by organizing your current retirement accounts after leaving a job. “Roll over your old 401(k) accounts into your current employer’s plan or an individual retirement account to ensure you are in control,” Ashton says.
It’s also helpful to search old employee statements, like 401(k) or pension benefit statements. “If you’ve moved since your last statement and forgot to change your address, you should be able to contact the customer service number on the old statement and update your information with the company,” says Jeff Busch, partner and investment advisor representative at Lift Financial in South Jordan, Utah.
[Read: How to Find a Lost Pension Plan.]
Search Online for Unclaimed Retirement Benefits
There are multiple online databases and tools that can help you search for unclaimed retirement benefits. “Solid options there include the National Registry of Unclaimed Retirement Benefits and the Pension Benefit Guaranty Corporation website,” Ashton says.
Several state governments provide assistance in finding old retirement and workplace benefits, offering valuable resources and guidance to help individuals recover their unclaimed funds. The Department of Labor also has an abandoned plan search tool.
Get Creative if Your Ex-Company Went Out of Business
Don’t give up if your old employer has gone out of business.
“Even if your former employer is no longer in operation or has merged with another company, specialized resources like the (National Registry of Unclaimed Retirement Benefits) can assist in tracking down your lost retirement benefits,” says Terry Turner, a financial wellness facilitator and analyst for RetireGuide.com.
[Read: How Many Retirement Accounts Should You Have?]
Work With a Financial Advisor
To maximize your odds of finding old retirement accounts, partner up with a financial advisor who has helped others dig up old 401(k) plans.
“Working with a financial advisor can be beneficial when sorting out old retirement plans, and in some cases is crucial to ensure you are maximizing your retirement funds,” Ashton notes.
A trusted financial can help you manage your retirement funds in other useful ways, Ashton says, including:
— Providing guidance on investment choices within your retirement accounts.
— Creating a retirement roadmap that takes into account all your retirement savings, ensuring they align with your long-term goals.
— Offering advice on tax-efficient strategies for managing your retirement accounts.
— Assisting with estate planning and beneficiary designations to ensure your retirement assets are passed on according to your wishes.
— Monitoring your retirement portfolio and make adjustments as needed to keep you on track for a comfortable retirement.
“Basically, If you’re unsure about anything, a financial advisor can assist you in tracking down unclaimed retirement benefits and provide guidance on how to manage them,” Ashton adds.
More from U.S. News
IRA Versus 401(k): Which Is Better?
How to Find a Lost Pension Plan
What Are Unclaimed Retirement Benefits and How Do I Find Them? originally appeared on usnews.com
Update 09/18/23: This story was previously published at an earlier date and has been updated with new informatuon.
