How to Find Unclaimed Retirement Benefits
If you’re interested in making more money in your line of work, changing jobs might be the best tactic. According to a survey by Willis Towers Watson, the average worker can expect a salary increase of just 3.4% in 2022. With inflation above 8%, that increase doesn’t feel as rich anymore. So what should a worker do?
change job. A new position can result in an average 14% increase in income, with some job changes earning up to 30% more annual salary. But with every job change comes a new benefit package. If you’re not meticulous about extending your retirement accounts, you can quickly lose track of various employer-sponsored accounts like 401(k)s or 403(b)s.
You’re not alone if you’re not sure where your old retirement accounts are. While there’s no verifiable number of forgotten accounts, the problem has spawned a number of companies willing to track down your lost retirement dollars and help you put them into an IRA. While this may seem like the path of least resistance, finding them yourself may also be possible. You just have to know where to look.
The central theses
- Changing jobs can mean workers have multiple retirement accounts.
- Some companies will track down your old account for you.
- You can find the accounts yourself with a little legwork.
- Turn your accounts into stable investments once you find them.
Ask your former employer
Most forgotten retirement accounts are linked to a former employer. Because accounts like 401(k)s and 403(b)s are employer-sponsored plans, the company elects the administrator and keeps records of all accounts. The first step is to call your benefits manager at your former company and ask if they have a history of your account.
If this is the case, you can contact the account admin to roll over your funds to a new account or cash out the account. However, depending on your age, this can trigger prepayment penalties and taxes.
What if your company went under? In this case, you must contact the source directly – the plan administrator. Some common account administrators are Fidelity, Vanguard, Charles Schwab, and TD Ameritrade. Suppose you don’t remember your login or password. In this case, a customer service representative should be able to verify your identity using other authentication methods such as your social security number, your mother’s maiden name, or security questions.
If you don’t remember the name of your plan administrator, you can find the information on the US Department of Labor (DOL) website. Each company must file a Form 5500 to report the company’s plan administrator, its assets and participants. You can navigate to the E-Fast system through the DOL website which searches for company names as long as your tenure there was after 2010.
To find the 5500 form, follow these steps:
- Visit the DOL website.
- Enter the name of your former company in the search bar. Be as specific as possible if it is a common company name.
- Once the list appears, select the year you left the company and click the download icon.
- A new window will open with the company’s Form 5500. Depending on the year and filing, you may have to search for the admin’s name, but it will appear there.
Tip
If you’ve changed your name since you left your job, try searching for your previous name. Many unclaimed funds tracing services look by name first, rather than by social security number.
Check portals for unclaimed property
If the DOL cannot point you in the right direction, you may need to try unclaimed funds portals. If money remains in a 401(k) for an extended period after termination of employment, the money is sometimes remitted to a state bureau of unclaimed property. These offices hold unclaimed funds until the rightful owner claims them.
The good news is that finding your money is fairly easy using one of several database search programs. Sites like MissingMoney.com, Unclaimed.org, or searching the National Registry of Unclaimed Retirement Benefits at unclaimedretirementbenefits.com can help you find old accounts based on your name and where you live.
Next Steps
Once you’ve found your account, transfer it to a new IRA with a company that you have an existing relationship with and will continue to monitor. You can easily convert the account to a traditional or Roth IRA.
What happens if I never claim my account?
If an account has been turned over to the Unclaimed Property Department, it will remain there until someone claims it. This person must be the original owner or heir to the original owner. If you die and your inheritance remains unclaimed, it remains in the unclaimed estate account forever.
How long will my money stay in my retirement plan?
This varies by company and account balance, and depends on what happens with the plan. If the company goes into liquidation, you may have to decide what to do with it or risk having it turned into cash very quickly. Otherwise, most plans convert to cash within three years. If your account has less than $1,000, the company may write you a check for the amount and close your account.
Will my money continue to grow after I leave?
While the money is enrolled in the 401(k), it can continue to grow. However, if the fund is converted into cash, it will no longer earn compound interest. It will also not be subject to the vagaries of the market, so its liquidity status can be good or bad. If your account balance is more than $5,000 and you are happy with how your wealth is distributed, you can leave the money where it is.
The final result
While job hopping can help you make more money over time, you should take care of loose ends when you leave a position. If you suspect your retirement account is perishing in cyberspace, do a little legwork to get it back to its rightful place: your portfolio.