Keep Track of Old Retirement Accounts
When you quit your last job, what happened to your retirement account? Did you turn it over? Leave it because you liked the plan options? Forget about it completely? If the latter, then you are not alone. Between 2004 and 2013, more than 25 million workers left at least one retirement account when they switched employers, according to the US Government Accountability Office . According to Kiplinger, this translates into a lack of retirement benefits for hundreds of billions of dollars.
As the GAO points out, you usually have to provide your old employers with the new address information and respond to other messages. The Labor Department noted that some retirement plan sponsors do not continue to search for workers if critical account information is returned as undeliverable and there is no DOL rule that stipulates how companies should track plan members who receive new jobs.
While keeping money is not necessarily a bad thing – after all, it’s still yours – you may be paying huge fees that you are not aware of, or that your investment may require upgrades. And of course, you don’t want to lose your money forever.
This is a bigger problem for today’s workforce than it used to be, as people quit their jobs more often. And if you wait years – say, you’re about to retire – to figure out where all your money is, you probably have a hard time getting it back, if you ever did. Your old company may have gone through bankruptcy or merger, or abandoned its obligations. It is even possible that your 401 (k) was transferred to the IRA (employers can do this without your consent if your 401 (k) has less than $ 5,000).
How to recover accounts
So what can you do? You will want to keep any records you receive about your retirement plans and notify your former employers if your contact information changes. You can also combine 401 (k) into one IRA or your new employer’s 401 (k) plan to make it easier to keep track of yourself.
Of course, you can contact your old employer’s HR department and ask if they have any records of your plan and its assets. If they don’t have the information, they can refer you to a plan monitoring agency (such as Fidelity or Vanguard). If you are unable to reach your old employer, check the news clippings: they may have merged with another company or changed names and may have a new plan provider.
You must keep all your tax returns indefinitely if you have a pension, says Jeanne Medeiros, director of the University of Massachusetts Boston Retirement Action Center, because “plans sometimes incorrectly state that they have already paid benefits and your tax returns can prove that you did not receive payments. “
If your old company is terminating your plan, they must notify you. You can also search for terminated plans on the Pension Rights Center website as well as the DOL website , and you can search for unclaimed retirement benefits through the National Unclaimed Retirement Benefit Register .
Finally, if you do decide to merge your old accounts, just contact their management companies, tell them how you want to move your money, then follow their instructions. Some managers may do the transfers themselves, but if they send you a check, be sure to transfer the money to your new retirement account within 60 days to avoid being taxed. And be glad that you are not one of the tens of millions who are losing their money.