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Yahoo
a day ago
- Business
- Yahoo
$1.7 trillion sits in lost and forgotten 401(k) accounts. Is one of them yours?
At least $1.7 trillion languishes in lost or forgotten 401(k) accounts, with an average unclaimed balance of $56,616. Those 29 million idle accounts represent one quarter of all assets held in 401(k) retirement plans. And those figures come from a 2023 report from Capitalize, a financial services firm. The numbers could be higher now. 'That's a heck of a lot of money,' said James Royal, an investing analyst at Bankrate. 'You could really have tens of thousands of dollars out there.' It's hard to fathom how anyone could lose track of $56,000, until you stop to consider the circumstances behind the typical lost 401(k) account. 'People who are leaving a job, and especially if they're moving to another one, usually have a bunch of things going on,' said David John, a senior strategic policy adviser at the AARP Public Policy Institute. The average American born between 1957 and 1964 has changed jobs about a dozen times, AARP reports. A record 47 million Americans quit their jobs in 2021 alone, amid the Great Resignation. A worker who leaves a job after a year or two might have only a few thousand dollars saved in a retirement account. In the stress of a job change, it's easy to lose track of those funds. Workers might struggle with how to 'roll over' the savings into a new account. The balance might not seem to justify the effort. Wait a decade or two, however, and the balance in a forgotten account can balloon into a tidy sum. The reason: Most 401(k) funds tend to be invested in stocks, and the market has made enormous gains in recent decades. 'Even 10 or 15 years ago, if you put in $5-, $6-, $7,000, that could be worth three, four or five times as much today,' Royal said. Tracking down lost 401(k) accounts has never been easier, according to Royal and other retirement-plan experts. A curious consumer with an hour to spare can go a long way toward rooting out lost savings. Here are some tips, starting with the easy stuff. First, visit the National Registry of Unclaimed Retirement Benefits. As the name suggests, it's a national database of unclaimed retirement accounts. Enter your Social Security Number, run a quick search and see if any idle accounts come back. Next, proceed to the Retirement Savings Lost and Found Database. This is a new site, launched by the Department of Labor to help workers locate unclaimed benefits. The lost and found site is 'still trying to reach scale with a lot of providers' and not yet comprehensive, said Rita Assaf, vice president of retirement savings at Fidelity. But it's another convenient, one-stop destination for finding retirement funds in your name. Third, visit Missing Money, a clearinghouse of unclaimed property held by U.S. states and Canadian provinces. Another one-stop site, Missing Money can direct users to all sorts of unclaimed property, including retirement accounts. 'It's been around for a few years, but it's not as widely known as it should be,' said John of AARP. The steps above should provide a good sense of potential unclaimed retirement funds in your name. The next moves might take a bit more time. Search your employment records. Look for old retirement plan statements, in electronic or paper form. Alternately, seek out old pay stubs and W-2 forms, and look for contributions to retirement plans. Contact old employers, if you can find them. Start with the human resources department. Someone there might know if you participated in a 401(k) or, at a minimum, which company administered the plan. If you think you know which plan administrator held your account, contact that company directly. 'There are not that many 401(k) plan administrators out there,' said Kate Ashford, a retirement expert at NerdWallet. 'You could take an afternoon and call them all.' Ask to speak to the 401(k) department. A representative will typically ask for your Social Security Number and other identifying information, which can help the administrator find any old retirement accounts under your name. If a lost retirement plan is 'from many years ago,' Assaf said, 'that plan may not still be available at Fidelity. It could be somewhere else.' For retirement accounts with a balance under $1,000, a plan administrator may have liquidated the account and cut a check, which might have gone 'to your last-known address,' Ashford said. For balances in the low thousands, the administrator may have rolled the account into an IRA at another financial institution. Several other sites can help consumers search for clues about abandoned retirement accounts. The Department of Labor's abandoned plan database can help an ex-worker locate a terminated plan. The same agency allows users to search a database of Form 5500, which is filed annually for 401(k) plans and can help users identify and contact both former employers and plan administrators. But records only go back to 2010. Don't want to search for lost 401(k) funds yourself? At least two private companies, Capitalize and Beagle, operate concierge services that can do it for you. Fewer 401(k)s will go missing in future, experts say, thanks to the evolving concept of "auto-portability" in retirement plans. A new initiative in the retirement-savings industry encourages workers to roll over a 401(k) account into an IRA when they leave a job, whereupon the money can automatically transfer to a retirement plan at a new employer. The auto-portability program applies to accounts valued at $7,000 or less. Research shows low-value accounts are more likely to be cashed out or forgotten, potentially losing thousands of dollars of compounded interest over time. In 2022, a consortium of private retirement-plan providers announced a collaboration to boost the portability of small retirement accounts. When someone leaves a job, the network of providers will make sure that any retirement funds 'move seamlessly from one job to another,' said John of AARP. This article originally appeared on USA TODAY: $1.7 trillion sits in lost 401(k) accounts. Is one of them yours? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
$1.7 trillion sits in lost and forgotten 401(k) accounts. Is one of them yours?
At least $1.7 trillion languishes in lost or forgotten 401(k) accounts, with an average unclaimed balance of $56,616. Those 29 million idle accounts represent one quarter of all assets held in 401(k) retirement plans. And those figures come from a 2023 report from Capitalize, a financial services firm. The numbers could be higher now. 'That's a heck of a lot of money,' said James Royal, an investing analyst at Bankrate. 'You could really have tens of thousands of dollars out there.' It's hard to fathom how anyone could lose track of $56,000, until you stop to consider the circumstances behind the typical lost 401(k) account. 'People who are leaving a job, and especially if they're moving to another one, usually have a bunch of things going on,' said David John, a senior strategic policy adviser at the AARP Public Policy Institute. The average American born between 1957 and 1964 has changed jobs about a dozen times, AARP reports. A record 47 million Americans quit their jobs in 2021 alone, amid the Great Resignation. A worker who leaves a job after a year or two might have only a few thousand dollars saved in a retirement account. In the stress of a job change, it's easy to lose track of those funds. Workers might struggle with how to 'roll over' the savings into a new account. The balance might not seem to justify the effort. Wait a decade or two, however, and the balance in a forgotten account can balloon into a tidy sum. The reason: Most 401(k) funds tend to be invested in stocks, and the market has made enormous gains in recent decades. 'Even 10 or 15 years ago, if you put in $5-, $6-, $7,000, that could be worth three, four or five times as much today,' Royal said. Tracking down lost 401(k) accounts has never been easier, according to Royal and other retirement-plan experts. A curious consumer with an hour to spare can go a long way toward rooting out lost savings. Here are some tips, starting with the easy stuff. First, visit the National Registry of Unclaimed Retirement Benefits. As the name suggests, it's a national database of unclaimed retirement accounts. Enter your Social Security Number, run a quick search and see if any idle accounts come back. Next, proceed to the Retirement Savings Lost and Found Database. This is a new site, launched by the Department of Labor to help workers locate unclaimed benefits. The lost and found site is 'still trying to reach scale with a lot of providers' and not yet comprehensive, said Rita Assaf, vice president of retirement savings at Fidelity. But it's another convenient, one-stop destination for finding retirement funds in your name. Third, visit Missing Money, a clearinghouse of unclaimed property held by U.S. states and Canadian provinces. Another one-stop site, Missing Money can direct users to all sorts of unclaimed property, including retirement accounts. 'It's been around for a few years, but it's not as widely known as it should be,' said John of AARP. The steps above should provide a good sense of potential unclaimed retirement funds in your name. The next moves might take a bit more time. Search your employment records. Look for old retirement plan statements, in electronic or paper form. Alternately, seek out old pay stubs and W-2 forms, and look for contributions to retirement plans. Contact old employers, if you can find them. Start with the human resources department. Someone there might know if you participated in a 401(k) or, at a minimum, which company administered the plan. If you think you know which plan administrator held your account, contact that company directly. 'There are not that many 401(k) plan administrators out there,' said Kate Ashford, a retirement expert at NerdWallet. 'You could take an afternoon and call them all.' Ask to speak to the 401(k) department. A representative will typically ask for your Social Security Number and other identifying information, which can help the administrator find any old retirement accounts under your name. If a lost retirement plan is 'from many years ago,' Assaf said, 'that plan may not still be available at Fidelity. It could be somewhere else.' For retirement accounts with a balance under $1,000, a plan administrator may have liquidated the account and cut a check, which might have gone 'to your last-known address,' Ashford said. For balances in the low thousands, the administrator may have rolled the account into an IRA at another financial institution. Several other sites can help consumers search for clues about abandoned retirement accounts. The Department of Labor's abandoned plan database can help an ex-worker locate a terminated plan. The same agency allows users to search a database of Form 5500, which is filed annually for 401(k) plans and can help users identify and contact both former employers and plan administrators. But records only go back to 2010. Don't want to search for lost 401(k) funds yourself? At least two private companies, Capitalize and Beagle, operate concierge services that can do it for you. Fewer 401(k)s will go missing in future, experts say, thanks to the evolving concept of "auto-portability" in retirement plans. A new initiative in the retirement-savings industry encourages workers to roll over a 401(k) account into an IRA when they leave a job, whereupon the money can automatically transfer to a retirement plan at a new employer. The auto-portability program applies to accounts valued at $7,000 or less. Research shows low-value accounts are more likely to be cashed out or forgotten, potentially losing thousands of dollars of compounded interest over time. In 2022, a consortium of private retirement-plan providers announced a collaboration to boost the portability of small retirement accounts. When someone leaves a job, the network of providers will make sure that any retirement funds 'move seamlessly from one job to another,' said John of AARP. This article originally appeared on USA TODAY: $1.7 trillion sits in lost 401(k) accounts. Is one of them yours?
USA Today
3 days ago
- Business
- USA Today
$1.7 trillion sits in lost and forgotten 401(k) accounts. Is one of them yours?
$1.7 trillion sits in lost and forgotten 401(k) accounts. Is one of them yours? Show Caption Hide Caption How are tariffs and your 401(k) retirement savings intertwined? Experts say a rise in tariffs can lead to several factors that impact your retirement savings. At least $1.7 trillion languishes in lost or forgotten 401(k) accounts, with an average unclaimed balance of $56,616. Those 29 million idle accounts represent one quarter of all assets held in 401(k) retirement plans. And those figures come from a 2023 report from Capitalize, a financial services firm. The numbers could be higher now. 'That's a heck of a lot of money,' said James Royal, an investing analyst at Bankrate. 'You could really have tens of thousands of dollars out there.' It's hard to fathom how anyone could lose track of $56,000, until you stop to consider the circumstances behind the typical lost 401(k) account. 'People who are leaving a job, and especially if they're moving to another one, usually have a bunch of things going on,' said David John, a senior strategic policy adviser at the AARP Public Policy Institute. The average American born between 1957 and 1964 has changed jobs about a dozen times, AARP reports. A record 47 million Americans quit their jobs in 2021 alone, amid the Great Resignation. A worker who leaves a job after a year or two might have only a few thousand dollars saved in a retirement account. In the stress of a job change, it's easy to lose track of those funds. Workers might struggle with how to 'roll over' the savings into a new account. The balance might not seem to justify the effort. Wait a decade or two, however, and the balance in a forgotten account can balloon into a tidy sum. The reason: Most 401(k) funds tend to be invested in stocks, and the market has made enormous gains in recent decades. 'Even 10 or 15 years ago, if you put in $5-, $6-, $7,000, that could be worth three, four or five times as much today,' Royal said. Tracking down lost 401(k) accounts has never been easier, according to Royal and other retirement-plan experts. A curious consumer with an hour to spare can go a long way toward rooting out lost savings. Here are some tips, starting with the easy stuff. Finding a lost 401(k): The low-hanging fruit First, visit the National Registry of Unclaimed Retirement Benefits. As the name suggests, it's a national database of unclaimed retirement accounts. Enter your Social Security Number, run a quick search and see if any idle accounts come back. Next, proceed to the Retirement Savings Lost and Found Database. This is a new site, launched by the Department of Labor to help workers locate unclaimed benefits. The lost and found site is 'still trying to reach scale with a lot of providers' and not yet comprehensive, said Rita Assaf, vice president of retirement savings at Fidelity. But it's another convenient, one-stop destination for finding retirement funds in your name. Third, visit Missing Money, a clearinghouse of unclaimed property held by U.S. states and Canadian provinces. Another one-stop site, Missing Money can direct users to all sorts of unclaimed property, including retirement accounts. 'It's been around for a few years, but it's not as widely known as it should be,' said John of AARP. Finding a lost 401(k): Some effort required The steps above should provide a good sense of potential unclaimed retirement funds in your name. The next moves might take a bit more time. Search your employment records. Look for old retirement plan statements, in electronic or paper form. Alternately, seek out old pay stubs and W-2 forms, and look for contributions to retirement plans. Contact old employers, if you can find them. Start with the human resources department. Someone there might know if you participated in a 401(k) or, at a minimum, which company administered the plan. If you think you know which plan administrator held your account, contact that company directly. 'There are not that many 401(k) plan administrators out there,' said Kate Ashford, a retirement expert at NerdWallet. 'You could take an afternoon and call them all.' Ask to speak to the 401(k) department. A representative will typically ask for your Social Security Number and other identifying information, which can help the administrator find any old retirement accounts under your name. If a lost retirement plan is 'from many years ago,' Assaf said, 'that plan may not still be available at Fidelity. It could be somewhere else.' For retirement accounts with a balance under $1,000, a plan administrator may have liquidated the account and cut a check, which might have gone 'to your last-known address,' Ashford said. For balances in the low thousands, the administrator may have rolled the account into an IRA at another financial institution. Finding a lost 401(k): Other resources Several other sites can help consumers search for clues about abandoned retirement accounts. The Department of Labor's abandoned plan database can help an ex-worker locate a terminated plan. The same agency allows users to search a database of Form 5500, which is filed annually for 401(k) plans and can help users identify and contact both former employers and plan administrators. But records only go back to 2010. Don't want to search for lost 401(k) funds yourself? At least two private companies, Capitalize and Beagle, operate concierge services that can do it for you. Can I have that 401(k) to go? Fewer 401(k)s will go missing in future, experts say, thanks to the evolving concept of "auto-portability" in retirement plans. A new initiative in the retirement-savings industry encourages workers to roll over a 401(k) account into an IRA when they leave a job, whereupon the money can automatically transfer to a retirement plan at a new employer. The auto-portability program applies to accounts valued at $7,000 or less. Research shows low-value accounts are more likely to be cashed out or forgotten, potentially losing thousands of dollars of compounded interest over time. In 2022, a consortium of private retirement-plan providers announced a collaboration to boost the portability of small retirement accounts. When someone leaves a job, the network of providers will make sure that any retirement funds 'move seamlessly from one job to another,' said John of AARP.
Yahoo
6 days ago
- Business
- Yahoo
NYC man lost $114,000 — his entire 401(k) — after his physical check from Paychex was stolen and cashed
Dylan Handy did everything right — or so he thought. Two years ago, when he was 33, Handy tried to roll over his $114,000 401(k) after switching jobs. Instead of a secure digital transfer, Paychex sent paper checks. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Unfortunately for Handy, those checks were intercepted and fraudulently cashed. 'This outdated and insecure method remains standard practice in the retirement industry,' Handy told The New York Times. The kicker? Handy wasn't even told electronic transfer was an option. And more importantly, he may now owe taxes on a stolen account. So why are retirement plan administrators still using physical checks? And how can you protect your money and avoid ending up in a situation similar to Handy's? A 2024 survey by Capitalize revealed just how many people still deal with paper checks during rollovers — a whopping 43%. Americans are running out of patience. More than 80% of savers say rolling over a 401(k) should be as simple as making a bank transfer. But for those stuck with the manual process, it often means phone calls, long wait times and a lot of uncertainty. So why are plan administrators holding on to this outdated method? Physical checks persist because of legacy systems, regulatory concerns and a lack of standardized digital options. In Hardy's case, he's now in federal court suing Paychex after months of getting nowhere with banks and no reimbursement for the bulk of his lost savings. His lawyer argues Paychex is responsible. Paper checks in 401(k) rollovers expose savers to serious risks, including: Fraud and theft: Physical checks are easier to intercept, alter or cash without authorization. Delays and inconvenience: Mailing checks, waiting for them to clear and making sure they reach the right hands can take weeks — sometimes months. Capitalize found that 42% of savers experienced rollovers that took two months or more. Lack of transparency: Tracking paper checks and resolving problems can be a nightmare. In fraud cases, figuring out who's responsible and recovering money is often a complex, drawn-out process. Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says — and that 'anyone' can do it While protections like the Employee Retirement Income Security Act (ERISA) exist, they are limited. There's only so much liability coverage. If a check is stolen and cashed by someone else, blame may fall on the issuer, the accepting bank or the account holder. Sorting that out can take a long time. And even when a claim is valid, banks may take up to 90 days to respond. That you could be without your retirement funds for months. With check fraud and scams on the rise, protecting your money during a 401(k) rollover is more important than ever. Here are a few smart steps to keep your savings safe: Work with a qualified advisor: Make sure any financial advisor you consult is a Certified Financial Planner™ who's legally required to act in your best interest. The right advisor can help you avoid shady products and high-pressure sales tactics. Opt for direct transfers: Whenever possible, ask your 401(k) provider to transfer funds directly to your new retirement account. It's faster and more secure. Use secure mail: If a paper check is your only option, request certified mail with tracking. This cuts down the chance of interception. Monitor your accounts: Check your accounts regularly for suspicious activity. If something looks off, report it immediately. Stay informed: New scams pop up all the time — from fake self-directed IRAs to bogus investment platforms. The more you know, the easier it is to spot red flags. Check fraud isn't going away, so it's up to people saving for retirement to stay alert and take action. Even though some protections are in place, being proactive is your best defense. Your retirement money deserves better than a risky, outdated process, it deserves your full attention. Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now This is how American car dealers use the '4-square method' to make big profits off you — and how you can ensure you pay a fair price for all your vehicle costs Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
NYC man lost $114,000 — his entire 401(k) — after his physical check from Paychex was stolen and cashed
Dylan Handy did everything right — or so he thought. Two years ago, when he was 33, Handy tried to roll over his $114,000 401(k) after switching jobs. Instead of a secure digital transfer, Paychex sent paper checks. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Unfortunately for Handy, those checks were intercepted and fraudulently cashed. 'This outdated and insecure method remains standard practice in the retirement industry,' Handy told The New York Times. The kicker? Handy wasn't even told electronic transfer was an option. And more importantly, he may now owe taxes on a stolen account. So why are retirement plan administrators still using physical checks? And how can you protect your money and avoid ending up in a situation similar to Handy's? A 2024 survey by Capitalize revealed just how many people still deal with paper checks during rollovers — a whopping 43%. Americans are running out of patience. More than 80% of savers say rolling over a 401(k) should be as simple as making a bank transfer. But for those stuck with the manual process, it often means phone calls, long wait times and a lot of uncertainty. So why are plan administrators holding on to this outdated method? Physical checks persist because of legacy systems, regulatory concerns and a lack of standardized digital options. In Hardy's case, he's now in federal court suing Paychex after months of getting nowhere with banks and no reimbursement for the bulk of his lost savings. His lawyer argues Paychex is responsible. Paper checks in 401(k) rollovers expose savers to serious risks, including: Fraud and theft: Physical checks are easier to intercept, alter or cash without authorization. Delays and inconvenience: Mailing checks, waiting for them to clear and making sure they reach the right hands can take weeks — sometimes months. Capitalize found that 42% of savers experienced rollovers that took two months or more. Lack of transparency: Tracking paper checks and resolving problems can be a nightmare. In fraud cases, figuring out who's responsible and recovering money is often a complex, drawn-out process. Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says — and that 'anyone' can do it While protections like the Employee Retirement Income Security Act (ERISA) exist, they are limited. There's only so much liability coverage. If a check is stolen and cashed by someone else, blame may fall on the issuer, the accepting bank or the account holder. Sorting that out can take a long time. And even when a claim is valid, banks may take up to 90 days to respond. That you could be without your retirement funds for months. With check fraud and scams on the rise, protecting your money during a 401(k) rollover is more important than ever. Here are a few smart steps to keep your savings safe: Work with a qualified advisor: Make sure any financial advisor you consult is a Certified Financial Planner™ who's legally required to act in your best interest. The right advisor can help you avoid shady products and high-pressure sales tactics. Opt for direct transfers: Whenever possible, ask your 401(k) provider to transfer funds directly to your new retirement account. It's faster and more secure. Use secure mail: If a paper check is your only option, request certified mail with tracking. This cuts down the chance of interception. Monitor your accounts: Check your accounts regularly for suspicious activity. If something looks off, report it immediately. Stay informed: New scams pop up all the time — from fake self-directed IRAs to bogus investment platforms. The more you know, the easier it is to spot red flags. Check fraud isn't going away, so it's up to people saving for retirement to stay alert and take action. Even though some protections are in place, being proactive is your best defense. Your retirement money deserves better than a risky, outdated process, it deserves your full attention. Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now This is how American car dealers use the '4-square method' to make big profits off you — and how you can ensure you pay a fair price for all your vehicle costs Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
