Do I Have a 401(k) I Don’t Know About?
Making sure you don’t have a 401(k) you don’t know about is important. Managing your retirement accounts in one place can help make it easier to reach your retirement goals.
Contributing to a workplace-sponsored 401(k) plan should be a priority when starting a new job, especially if that company promises to match whatever contributions you make. Many companies automatically enroll their new hires into their 401(k) on their first day or upon eligibility. It’s easy to lose track and forget if you have a 401(k) that you don’t know about.
On top of that, leaving jobs at the frequency Americans are today can cause many 401(k) participants to forget to bring their 401(k)s with them to their new jobs.
If you’re reading this wondering if you have a 401(k) you don’t know about, there are ways you can search and find out.
The most obvious places to look are your current and former employer’s human resource department. Additionally, a few outside resources can help you, such as national abandoned plan databases and companies like Beagle.
Knowing where to look and when to utilize these different methods can help expedite your search and bring those forgotten 401(k)s back into an account you can manage more effectively.
How to Search for Lost 401(k)s
As mentioned before, there are ways you can find any 401(k) that belong to you that you don’t know about. Some take a simple phone call; others may take a little more digging.
Contact Your Current Employer’s HR Department
Contacting your employer’s human resources department should be easy enough. They’ll have records if you have a 401(k) with them.
Along with identifying if you have a 401(k), they can get your information updated so you can receive vital information such as statements and notifications. They can also help you set up your online account access if they provide one. This is a great way to actively monitor your account, identify any fees you’re paying, and change your contribution amounts.
If you don’t currently have a 401(k) with your employer, make sure you sign up for one as soon as possible. Choosing not to contribute to a 401(k) is much worse than forgetting whether you had one in the first place.
Contact Your Former Employer’s HR Department
If you’ve jumped around a few jobs in your career, there’s a good chance you left a 401(k) at one of them. Make a list of everywhere you’ve worked previously and get the contact information to their human resources department.
They’ll have records of whether you had a 401(k) with them or not. If you did have one with them, they could let you know where it currently is.
Hopefully, they have kept your 401(k) where it was, making it easier for your to transfer it over to an actively managed retirement account you have.
Otherwise, they could have done few things with your 401(k). They could have cashed it out and sent you a check, rolled it over to an IRA for you, or sent it to your state’s treasury department. Whichever action they took with your 401(k), they should have information as to how to get access to your 401(k).
Unfortunately, if your 401(k) was cashed out and mailed to you and you don’t recall getting it, it may be more challenging to get another check sent to you.
Check a National Plan Database
For 401(k) plans that have been left with employers for a significant amount of time, companies have the option of sending these accounts off to their state’s treasury department.
Databases like the Department of Labor’s Abandoned Plan Search, National Registry of Unclaimed Retirement Benefits, and FreeERISA can find any 401(k) you don’t know about. Using information like your social security number, state, and employer’s name, they can scour national records and retrieve your 401(k) information.
Having a company do the searching for you is another excellent option. Beagle, the first company of its kind, will use your information and find your old 401(k)s whether you knew about them or not.
Additionally, they will identify any hidden fees you’re paying to these old plans and help you find low-cost alternatives to manage your 401(k)s.
Beagle will also facilitate having your old 401(k)s rolled over to your current 401(k) or IRA, whichever you choose.
What Should I Do if I Find a 401(k) I Didn't Know About?
Like finding a wad of cash under the sofa cushion, finding an old 401(k) may come as a surprise, it’s important to know your options if you do find an old 401(k) you didn’t know about.
Although not the best option, leaving it with your former employer is an option—for now. You shouldn’t plan to leave it alone for too long.
Most 401(k) plans will cash your 401(k) out and mail it to you if the balance is under $1,000, subjecting it to penalties and taxes. If the balance is over $1,000 but less than $5,000, they can transfer it over to an IRA of their choosing.
Once you’ve found an old 401(k), make a plan to do something with it soon before the plan’s administrator does something with it you don’t want.
Rollover to a 401(k)
If you’re currently contributing to a 401(k) with your current employer, rolling over your old 401(k) is a great option.
To do so, contact your current plan’s administrator to get information on how to facilitate transferring your old funds to your current account.
Your current plan’s administrator may even do the work for you and contact your old plan and handle the rollover on their end.
Rollover to an IRA
Another rollover option is to another qualifying retirement plan, like an IRA. An IRA will be held with an outside institution like Fidelity or Vanguard.
If you already have an IRA with one of these institutions, they will have instructions on how to roll over a 401(k) into your IRA.
Or, you can open an IRA with one without having to deposit any money in right away. Then, you can work to have your old 401(k) transferred over to the IRA you just opened. There you can allocate the funds to whatever investments you choose. You can even add more money to the account as much as you’d like.
Cash It Out
The last option you have is to cash out your old 401(k)s. Depending on the amount you have in your old 401(k), this may be a costly choice.
Withdrawing funds from a retirement account before 59½, even an old 401(k), will be subject to income tax and a 10% penalty tax by the IRS.
It may be tempting to view your old 401(k) as free money you found on the sidewalk. However, forfeiting hundreds or even thousands of dollars to an IRS early withdrawal penalty can be costly over time. Sacrifices decades of compounding growth had you rolled over your old 401(k) to another retirement account instead.