Discover Unclaimed Retirement Benefits
Uncover Forgotten Funds through a Little Investigation
If you want to boost your income, switching jobs can be a smart move. According to a survey by WTW (formerly Willis Towers Watson), the average worker can expect a mere 3.4% salary increase in 2022. However, with inflation exceeding 8%, that raise doesn’t hold the same value.
So, what’s the solution?
Consider making a job change. On average, switching to a new position can result in a 14% increase in earnings, with some job transitions leading to a remarkable 30% higher annual pay. However, with each job change comes a new benefits package, and if you neglect to properly manage your retirement accounts, you risk losing track of employer-sponsored accounts like 401(k)s or 403(b)s.
If you find yourself unsure about the whereabouts of your old retirement accounts, you’re not alone. Many individuals have forgotten about these accounts, giving rise to companies specializing in locating lost retirement funds and assisting with rollovers into individual retirement accounts (IRAs). While utilizing such services may seem convenient, it’s also possible to independently locate your accounts with some research and effort.
Key Points to Remember
- Changing jobs can result in multiple retirement accounts.
- Some companies offer assistance in locating old accounts.
- You can conduct your own search with a little legwork.
- After locating your accounts, consider transferring them to stable investments.
Contact Your Former Employer
Most forgotten retirement accounts are associated with previous employers. Since accounts like 401(k)s and 403(b)s are employer-sponsored plans, the company selects the account administrator and maintains records of all accounts. Begin by contacting your former company’s benefits manager to inquire about the status of your account.
If your former employer has the information, reach out to the account administrator to guide your funds into a new account through rollover or cash out the account. Keep in mind that age-related early withdrawal penalties and taxes may apply.
If your previous company is no longer in business, you’ll need to contact the plan administrator directly. Common account administrators include Fidelity, Vanguard, Charles Schwab, and TD Ameritrade. If you can’t recall your login credentials, customer service representatives can typically help verify your identity using alternative methods such as your Social Security number (SSN), 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 U.S. Department of Labor (DOL) website. Companies are required to file a Form 5500, which reports the plan administrator, assets, and participants. Visit the DOL website and access the EFAST system, which allows you to search by company name if your tenure was after 2010.
Follow these steps to find the Form 5500:
- Visit the DOL website.
- Enter your former company’s name in the search bar, providing specific details if it’s a common name.
- Choose the relevant year of your departure from the company and click the download icon.
- A new window will open with the company’s Form 5500. Depending on the filing, you may need to search for the administrator’s name, but it will be included.
If you have changed your name since leaving the company, try searching by your previous name. Many unclaimed funds search services prioritize searching by name rather than by Social Security number.
If the Department of Labor doesn’t provide the information you need, you can also explore unclaimed property portals. In some cases, when money remains in a 401(k) for an extended period after employment ends, it may be transferred to a state unclaimed property office. These offices hold unclaimed funds until the rightful owner claims them.
To find your lost funds, you can use various database search programs such as MissingMoney.com, Unclaimed.org, or the National Registry of Unclaimed Retirement Benefits at unclaimedretirementbenefits.com. These platforms allow you to search for old accounts using your name and state of residence.
Once you have successfully located your retirement account, it is advisable to consider rolling it over into a new Individual Retirement Account (IRA) with a trusted firm that will continue to monitor and manage your investments. You can choose between a traditional or Roth IRA based on your financial goals and circumstances.
It’s important to note that if an account has been turned over to the unclaimed property department, it will remain there until someone claims it. The rightful owner or their heir must claim the account. In the event of the account holder’s death, if the heir doesn’t claim it, the funds will remain in the unclaimed property account indefinitely.
The duration for which your money stays in your retirement plan depends on various factors such as the company’s policies and account balance. If the company is liquidating, you may need to make decisions regarding your funds to avoid them being converted to cash quickly. Generally, most plans will convert to cash within three years. If your account balance is less than $1,000, the firm may be permitted to cut you a check for the amount and close your account.
While your money is enrolled in a 401(k), it has the potential to continue growing. However, if the fund is converted to cash, it will no longer earn compound interest. On the other hand, it won’t be subjected to market fluctuations, which can have both positive and negative implications. If you have more than $5,000 in your account and are satisfied with your current asset allocation, you may choose to leave the money where it is.
In conclusion, when you leave a position, it’s essential to address any loose ends, including locating and managing your retirement accounts. If you suspect that you have unclaimed retirement funds, conducting some investigation can help you bring those funds back into your portfolio.
Disclaimer
The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. It is always recommended to conduct thorough research and consult with a professional advisor before making any investment decisions.
