LAST REVIEWED Dec 13 2019 8 MIN READ
By The Human Interest Team
A 401(k) plan helps you save for your retirement. However, because these plans are employer-specific, the money doesn’t transfer automatically when you change your job. The money either continues to remain in your old 401(k) account or goes into unclaimed funds of the state government if you do not transfer it to your new account.
Apart from brokerages and savings and checking accounts, most of the unclaimed funds come from a 401(k), annuities, and retirement accounts. The law requires companies to send unclaimed 401(k) funds to your address. However, if the funds can’t be delivered, they are handed over to the state.
How to Find an Old 401(k)
1. Finding a 401(k) From a Previous Employer
The easiest way to find a lost 401(k) is to contact your previous employer’s human resources department. They are most likely to have the balance and other details of your 401(k) account. They can also help you with documentation if you are looking to transfer your existing balance to a new 401(k) account. If an external agency is managing the plan, you can get the agency’s contact information from them.
While contacting your old employer, be sure to provide them with necessary details such as your complete name, Social Security number (SSN), and the exact period for which you worked for them.
2. Find Out Whether the Funds Have Been Transferred to IRAs
If your retirement account had a balance of more than $5,000, the money should be in your old account with your previous employer. Technically, you can leave the money there until you reach an age of 70 ½ years, when you become eligible for the distributions. However, you might not want to do that.
If your plan administrator has transferred your 401(k) balance to a bank account or the government, they may hold some amount for potential income tax and penalties. Such transfers are treated as distributions or cashouts, and the Internal Revenue Service (IRS) requires plan administrators to withhold applicable taxes and penalties.
Some plan administrators might send you and the IRS a Form 1099-R report on the balance and amount withheld for taxes, while others may not. If you haven’t received any such communication from your plan administrator, don’t be surprised if you receive an IOU (a demand notice) from the IRS.
3. Refer to Your Old Account Statement
Referring to your old records is another good way to trace your 401(k) account. Old account statements will give you your previous employer or plan administrator’s contact information. You can then get in touch with them for further information or action.
4. Contact Your Former Colleagues
Some of the former employees who worked with you may have their old records with them. Try referring to their records to get contact information of your old employer or plan administrator.
5. Unclaimed 401(k) Plan Search
The national registry of unclaimed retirement benefits lists the retirement accounts throughout the United States that have unclaimed balances. The idea is to help employees locate their abandoned accounts. You can check this database online to see if your account is listed there.
6. Check Whether Your Former Company Has Merged
When a company goes through a merger, it loses its previous identity and takes the identity of the acquiring company. In such cases, your old retirement account may also get merged with that of the acquiring company. If you are unable to track your old company, you may want to browse the news to see if it has merged with another company. You can then contact the acquiring company for your account details.
7. Check Form 5500
Most of the retirement plans file Form 5500 with the federal government. These forms are available on several free websites. Consider searching for the form filed by your former employer. If can find the form, you can get your former employer’s contact details from it.
8. Search the Abandoned Plan Database
The U.S. Department of Labor maintains an online database of abandoned plans. You can search this database to see if your plan has been or is in the process of being terminated. In either case, you can note the name of the Qualified Termination Administrator and contact them for further action on your account.
9. Check Databases of Unclaimed Property
If your former company chooses to terminate its retirement plan, it can use the unclaimed funds in several ways. You might consider searching various databases of unclaimed property to see if your money is there.
10. Check Your Tax Returns
You can also check your old tax returns to see if you have made any contributions toward a retirement plan. A 401(k) contribution would appear in Box 12 of your W-2 return.
How to Avoid Losing a 401(k) Plan
It can be difficult to track down a forgotten 401(k) account decades after leaving your old job. It’s always prudent to roll over your 401(k) account when you change your job. You can either roll over to your new employer’s plan or to an Individual Retirement Account (IRA). You might want to go with the option of trustee-to-trustee transfer so your money gets transferred directly to your new retirement account without the burden of tax withholdings and penalties.
How to Get My Retirement Money From an Old Employer
Your employer may allow you to leave your existing balance in your old 401(k) account. But you cannot continue contributing to your old plan after you leave your job. Still, it can be particularly helpful in cases where mutual funds charge your company lower management fees than what they would charge you as an individual investor.
Transferring your money to an IRA or rolling it over to your current employer also has advantages. It gives you more options in terms of investments and more flexibility in terms of account fees.
There are several ways to track your old 401(k) account. However, depending upon how old your account is, the process can be cumbersome and time-consuming. It’s always better to move your account with your new employer or transfer the money to the IRA.
Do you need more help tracking your old 401(k) plan? Contact us today for expert advice.
The Human Interest Team
We believe that everyone deserves access to a secure financial future, which is why we make it easy to provide a 401(k) to your employees. Human Interest offers a low-cost 401(k) with automated administration, built-in investment advising, and integration with leading payroll providers.