Andrew Shilling at MarketWatch reported that Americans have about $2.1 trillion sitting in roughly 31.9 million forgotten 401(k) accounts, with an average lost balance of $66,691. He asked me what actually goes wrong when an account gets left behind at an old employer.
My answer is that it is not usually one dramatic charge. It is a slow bleed of administrative fees that adds up over years, and most people never look closely enough to catch it. That bleed compounds against you at the exact moment you are not watching the account. Add a stale beneficiary designation from a job you left a decade ago and you have a real problem waiting for your family.
The article walks through how to find lost accounts: old plan statements, former HR departments, the Department of Labor's abandoned plan search and the new retirement savings lost-and-found database. Once you locate one, the decision is whether to roll it into your current plan or an IRA, where you can see it, control the fees and keep the beneficiariesThe people or entities designated to receive your assets when you die — through retirement accounts, life insurance policies, or trusts. Keeping beneficiary designations current is one of the simplest but most overlooked parts of estate planning, and outdated designations can completely override what your will says. current.
Every job change is a chance to lose track of an account. Make the rollover decision on the way out the door, not years later when you happen to remember it existed.
Read the full article at MarketWatch →
