As of 2023, there are an estimated 30 million 401k accounts and 1.65 trillion dollars that have been left behind as people change jobs. We have all experienced the excitement and anxiety of taking a new job, but don’t let those emotions cause you to forget about your old retirement plan.

That’s your hard-earned money… Take it with you!

Note: This article uses “401k” as a shorthand for all employer retirement plans. If you have an old 403b or SIMPLE IRA, the information below still applies to your account.

How to Find Your Old 401k

If you have lost track of your old 401k account, know you are not alone. Don’t be embarrassed about calling a former employer to ask how to find an old account - this is a common occurrence! Whenever you are ready to take a step forward with your finances is the right time. Finding your old 401k account is a great way to move forward with your money. 

All employer retirement plans are managed by a fund administrator. This would be a company like Empower, Betterment, Fidelity, Vanguard or ShareBuilder, to name a few. The first step to accessing your old retirement account is to have the name and contact info for the fund administrator. If it’s been a number of years since you worked at your former employer, the company may have also changed fund administrators and moved your account over during the change. 

If you can’t remember who your account was with and don’t have an account statement you can reference, here are some ways to find the fund administrator information:

1. Contact Human Resources or the Benefits team at your former employer. They can confirm the fund administrator for your retirement plan and provide contact information to access your old account. You may also find useful information about rollovers and accessing your account in the HR paperwork you received at the time you left the company.

2. Reach out to someone who still works at your former employer. If you are in touch with a former co-worker you can ask them the name of the 401k fund administrator to get you pointed in the right direction.

3. Check for retirement plan filings at the IRS. This is a free search and just requires the name of your former employer to access - 5500 search

Fund administrators charge fees to employers to maintain 401k accounts, and usually charge fees to plan participants as well. If there is less than $7,000 in your account, your former employer has the ability to move your account out of their plan and create an iRA on your behalf to avoid the maintenance fees. If this has happened to your old 401k account, you can find it through this free search: https://unclaimedretirementbenefits.com/search

If you had over $7,000 in your old 401k, chances are that your account is still active with the fund administrator. Once you have located it and gained access to the account, you can take control of it through a rollover

Why would you want to do a rollover? Ownership! You just went through the process of locating your money, now it’s time to grow it. If you move your old 401k account to a new account, you can avoid the fees from the fund administrator we mentioned above. More importantly, you can consolidate your money at a financial institution of your choice. Excited about eTrade? Like the employee-owned company story at Vanguard? You get to decide where to keep your money. As part of this decision, definitely review the types of accounts offered, any fees for opening an account or placing trades and the range of investments available.

How to Roll Over Your 401k

Before we talk about rollover options, you should know that the fund administrator for your old 401k might push you to open a managed account with them. You are under no obligation to this and you do not need to be working with an advisor to complete a rollover.

You have several choices when completing a rollover:

1. You can roll it into a Traditional IRA. If you had a traditional (pre-tax) 401k, you can open a Traditional IRA at the financial institution of your choice and move your old 401k there. There are no taxes associated with this rollover.

2. You can roll it into a Roth IRA. If you had a Roth 401k, you can open a Roth IRA at the financial institution of your choice and move your old Roth 401k there. There are no taxes associated with this rollover. If part of your account was a Traditional 401k, and part was a Roth 401k, you can open two accounts and roll the two types of 401ks into the corresponding IRAs.

3. You can convert some or all of it to a Roth IRA. If you had a traditional (pre-tax) 401k, you can turn some or all of it into a Roth IRA at the time of the rollover. Roth IRAs are very advantageous accounts that not only grow tax free over the decades that you have them, but also have tax-free withdrawals. Doing a Roth IRA conversion does have taxes associated with it, as you pay tax today on the account balance vs paying tax on retirement withdrawals. If you have the ability to do even a partial conversion, your Smart Sister would recommend it. Consult your tax preparer to understand how much you may owe in taxes on the conversion.

4. You can combine it with your current 401k. This is not the preferred choice as starting an IRA gives you greater investment choices and more flexibility, but it is a tax free option. 

Complete a rollover every time you change jobs. The sooner you do it after you leave your former employer, the easier it will be!

Much more about rollovers can be found in this blog post. 

How to Expand Your Retirement Strategy

Your employer retirement plan is the most efficient way to save for your future, but an IRA can also speed up your savings and provide additional options. Smart Siter Finance is all about buying life choices and the earlier you save and invest, the more choices you will have.

Now that you have an IRA funded with your old 401k, you can also add more money to it. In 2024, you can contribute up to $7,000 ($8,000 if you are age 50 or older) to either a Roth IRA or a Traditional IRA. How do you choose? If you are under the income cap (phase out between $146,000 and $161,000 for a single filer), definitely contribute to a Roth IRA as it grows tax free for life. If you are over the Roth IRA income cap, contributing to a Traditional IRA is still great as it grows tax free until retirement. If you are over this income cap, you probably need all the tax advantages you can get!

Your rollover does not count as an annual contribution. You can do the rollover and still add $7,000 (or $8,000) to it in the current year. Also, even if you can’t contribute to a Roth IRA because you make too much money, you can do a Roth IRA conversion (see Rollover choices in the previous section).

Summary

Tax advantaged accounts like 401ks are a very important part of saving for retirement. These accounts grow tax-free for decades, and even small amounts can grow to be significant dollars when you are in your 60s and 70s. Don’t give up on finding your old 401k accounts! Consolidating your money in accounts that you can more easily manage will grow your money confidence and your excitement about the future. 

If you need support tracking down your old 401k account, or you want to talk through your rollover options with a neutral party, schedule a coaching session below.